Business credit is widely used for operating expenses, expansion, refinancing, and future flexibility, but access is uneven. In the 2025 Small Business Credit Survey, 60% of small employer firms applied for financing during the prior 12 months, while 51% had their needs met under the survey’s combined definition. The figures below describe small employer firms unless another population is identified, and they distinguish survey periods, approval outcomes, and reported costs.
Contents
- Small-business debt levels
- Why firms seek financing
- Products and requested amounts
- How much financing applicants received
- Denials and funding barriers
- Lender choices, approvals, and costs
- Business owners’ access to credit
Small-business debt levels
The 2025 survey found that 31% of small employer firms had no outstanding debt at the time of the survey. Among all small employer firms, 63% held $100,000 or less in outstanding debt, while 37% held more than $100,000. These figures describe debt balances at the survey date, not a forecast of future borrowing.
The way firms secure debt also shows that business credit can involve the owner’s personal finances and company assets at the same time. Among firms with debt:
- 59% used a personal guarantee.
- 51% used business assets as security.
- 38% used personal assets as collateral.
- 19% pledged portions of future sales.
- 10% reported using no collateral or guarantee.
These security categories can overlap, so they should not be added together. They indicate the types of guarantees or collateral reported by firms with debt in the 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey.
Why firms seek financing
During the 12 months before the 2025 survey, 60% of small employer firms applied for financing. Operating needs were the most frequently reported reason: 56% of financing applicants sought funds to meet operating expenses. Other applicants were financing growth, managing existing obligations, or preserving options for later.
Among financing applicants, 46% sought funds to expand, pursue an opportunity, or acquire business assets. Another 42% sought financing to refinance or pay down debt. Available credit for future use was the goal for 28%, while 26% sought funds for repairs or replacement of capital assets. These purposes overlap because an applicant could report more than one reason.
Nonapplicant responses help explain why a firm may not appear in application statistics. Of firms that did not apply, 63% said financing was not needed or that they already had sufficient financing. However, 17% said the cost of credit was too high, 10% described themselves as debt averse, and 7% were discouraged because they expected not to be approved. The survey period for all of these nonapplicant figures was the 12 months before the 2025 survey.
The results point to more than one kind of financing gap. Under the survey’s combined definition, 51% of small employer firms had their funding needs met during that period. A further 34% had a financing shortfall after applying for financing, and 15% had unmet funding needs because they needed financing but did not apply. The last two figures describe different paths to unmet need and should not be treated as a single additive measure without the survey’s full definitions.
Products and requested amounts
Small firms sought several kinds of business credit during the period before the 2025 survey. The largest product category in the available figures was a loan, line of credit, or merchant cash advance, sought by 38% of small employer firms. A credit card was sought by 29%, trade credit by 17%, a lease by 11%, and factoring by 3%.
The requested amount was often modest relative to the total debt balances reported elsewhere in the survey. Among financing applicants, 37% sought less than $50,000. Within that distribution, 21% sought $25,000 or less and 16% sought $25,001 to $50,000. Another 22% sought $50,001 to $100,000.
| Requested financing amount | Share of financing applicants |
|---|---|
| $25,000 or less | 21% |
| $25,001–$50,000 | 16% |
| Less than $50,000 | 37% |
| $50,001–$100,000 | 22% |
The amount categories are not a complete distribution of every request size in the supplied survey results. In particular, the figures above do not state the share seeking more than $100,000. The categories also include the reported “less than $50,000” grouping and its two subranges, so the subranges should not be added to that grouping.
How much financing applicants received
Approval does not always mean that an applicant receives the full amount requested. Among financing applicants in the 12 months before the 2025 survey, 42% received all of the financing they sought. Fifteen percent received most of it, defined as 51%–99% of the amount sought. Twenty-one percent received some, defined as 1%–50%, and 22% received none.
| Financing received | Share of financing applicants |
|---|---|
| All requested financing | 42% |
| Most: 51%–99% | 15% |
| Some: 1%–50% | 21% |
| None | 22% |
The figures describe the portion of requested financing received, rather than a universal approval rate for every business credit product. They also help distinguish partial funding from a complete denial: 36% received either most or some of what they sought, while 22% received none. The source’s definitions and the 12-month measurement period matter when comparing these outcomes with lender-specific approval statistics.
Denials and funding barriers
Applicants who did not receive all requested financing reported several barriers. The most common reported reason was that lender requirements were too strict, cited by 46% of applicants who were not approved for at least some financing. Among applicants who did not receive all requested financing, 37% cited having too much debt already.
Credit profile and collateral were also frequent concerns. Thirty percent cited a low credit score, while 29% cited insufficient collateral. Another 29% cited weak sales, and 29% said lenders do not approve businesses like theirs. These are reported reasons among relevant applicant groups, not independent measurements of every lender’s underwriting decision.
The results should not be read as a ranking of objectively verified causes. Each percentage reflects what respondents cited about their financing outcome. Several reasons could apply to the same applicant, so the percentages do not describe mutually exclusive groups.
Lender choices, approvals, and costs
Online fintech lenders represented a larger share of applications for loans, lines of credit, and cash advances in 2025 than in 2020. Twenty-nine percent of applicants applied at online fintech lenders in 2025, compared with 17% in 2020, according to the 2026 Report on Employer Firms. The comparison covers the two survey years and should not be interpreted as a measure of all business financing applications.
Small banks recorded the highest full-approval rate among the lender categories shown: 57% of applicants at small banks were fully approved. Approval experience varied by credit risk. At small banks, 90% of low-credit-risk applicants were approved for at least some financing, compared with 61% of medium- or high-credit-risk applicants.
Reported borrowing costs also differed by lender type. Sixty percent of borrowers from online lenders said their actual borrowing costs were higher than expected, while 4% said costs were lower than expected. The corresponding higher-than-expected figures were 37% for small-bank borrowers and 32% for large-bank borrowers. These are borrower reports about expectations and actual costs, not a standardized interest-rate comparison.
Satisfaction was another part of the small-bank experience: 65% of applicants approved for at least some financing at small banks were satisfied with their lender. This measure applies to that approved applicant group and the 12 months before the 2025 survey; it is not a rating of every small-bank customer.
Business owners’ access to credit
The Consumer Financial Protection Bureau’s 2023 Making Ends Meet survey provides a different perspective on business credit by describing respondents who identified as small business owners. Thirteen percent of respondents in the 2023 survey waves identified as small business owners. Within that group, 49.5% said the business was their primary income source, and 40.6% reported a separate business line of credit or credit card.
The survey also reported overlap between small-business ownership and self-employment. Seventy-five percent of self-employed respondents identified as small business owners, while 62% of small business owners identified as self-employed. These percentages use different denominators, so they are not mirror-image measures and should not be compared as if they described the same base.
Financial circumstances varied within the small-business-owner group. In the 2023 survey waves, 26.5% reported annual income of $125,001 or more. Thirty-three percent reported $20,001 or more in household checking and savings accounts. Retirement saving was reported by 59.6%, who said someone in their household was currently saving for retirement.
The CFPB results come from The Financial Security of Small Business Owners: Evidence from the Making Ends Meet Survey. They describe survey respondents and household financial indicators in 2023, not the debt and application outcomes of the 2025 small employer-firm survey. Keeping those populations and measurement periods separate is essential when using business credit statistics to understand access, risk, and financing pressure.