Business debt takes many forms, from credit cards and bank loans to lines of credit, leases, and government disaster loans. The latest Small Business Credit Survey (SBCS) found that 31% of U.S. small employer firms had no outstanding debt in the 2025 survey, while 86% regularly used some form of financing. These measures describe weighted survey responses from firms generally employing 1–499 people; the latest survey was fielded September 3–November 14, 2025 and used a nationwide convenience sample.
Contents
- Outstanding business debt levels and trends
- How small businesses use debt and credit
- Why businesses seek financing
- Approval rates and application outcomes
- Debt costs, guarantees, and financial stress
- COVID-era EIDL debt
- Business debt in the broader credit market
Outstanding business debt levels and trends
The 2025 SBCS provides a recent snapshot of debt ownership among U.S. small employer firms. Thirty-one percent reported no outstanding debt, compared with 21% in the 2020 survey. Among firms that did have debt in 2025, 59% used a personal guarantee and 51% used business assets to secure it. Because these are multiple-response measures, the two security figures are not mutually exclusive.
The preceding 2024 survey provides a more detailed distribution of balances. Twenty-nine percent of small employer firms had no outstanding debt. The remaining reported balance ranges were:
| Outstanding debt balance | Share of U.S. small employer firms, 2024 survey |
|---|---|
| $25,000 or less | 12% |
| $25,001 to $50,000 | 9% |
| $50,001 to $100,000 | 12% |
| $100,001 to $250,000 | 14% |
| $250,001 to $1 million | 16% |
| More than $1 million | 8% |
The 2024 balance figures are measured at the survey date, while the 2025 report’s debt-free comparison tracks the share with no outstanding debt in each survey. They should not be treated as a single continuous time series. The 2024 figures also do not identify an average or median balance, so the distribution cannot support an estimated typical dollar amount.
Source: 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey; 2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey.
How small businesses use debt and credit
Regular financing use is broader than having a conventional loan balance. In the 2025 survey, 86% of U.S. small employer firms said they used financing on a regular basis. In the 2023 survey, the most common regularly used products were credit cards at 56% and loans at 53%. Lines of credit were used regularly by 34%.
Other products were less common. Trade credit and leases each had a 14% regular-use share. Merchant cash advances accounted for 5%, and factoring for 2%. Thirteen percent of firms reported that they did not use external financing in the 2023 survey.
These categories can overlap: a business may regularly use a credit card and a loan, for example. Regular-use statistics therefore describe the mix of financing tools rather than a breakdown in which each firm appears only once. They also do not say how much debt each product represents.
Source: 2024 Report on Employer Firms: Findings from the 2023 Small Business Credit Survey; 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey.
Why businesses seek financing
Financing demand remained common in the most recent surveys. Sixty percent of U.S. small employer firms applied for some type of financing during the 12 months before the 2025 survey. The comparable share was 59% during the 12 months before the 2024 survey.
Among applicants in the 2024 survey, 40% sought less than $50,000. Operating needs were the leading reported purpose: 56% sought funds to meet operating expenses. Forty-six percent sought money to expand, pursue a new opportunity, or acquire business assets. Forty percent wanted credit available for future use as needed.
Some applicants were addressing specific capital or balance-sheet needs. Twenty-seven percent sought funds to make repairs or replace capital assets, and another 27% sought funds to refinance or pay down debt. These are reported purposes among applicants and can overlap, so the percentages should not be added into a single total.
The results suggest that borrowing is not limited to expansion projects. Working capital, a future liquidity cushion, repairs, and refinancing were all significant reasons for seeking financing in the 12 months before the 2024 survey. The survey does not establish whether each application was ultimately approved or whether the requested amount was drawn.
Source: 2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey; 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey.
Approval rates and application outcomes
Financing applications did not always produce the requested amount. In the 2025 survey, 42% of financing applicants received the full amount they sought. Thirty-six percent received some or most of the amount sought, while 22% received none. These outcome groups describe applicants’ results and are reported as survey estimates; rounding may affect totals.
Thirty-eight percent of U.S. small employer firms applied for a loan, line of credit, or merchant cash advance during the 12 months before the 2025 survey. The share of applicants using online fintech lenders rose from 17% in the 2020 survey to 29% in the 2025 survey.
Provider outcomes differed. Fifty-seven percent of applicants at small banks were fully approved in the 2025 survey. In the 2023 survey, small banks approved at least some financing for 75% of applicants, compared with 66% at large banks. “Fully approved” and “approved at least some” are different measures, and the survey years also differ.
Borrowing-cost expectations were another point of divergence. Among businesses that borrowed from online lenders in the 2025 survey, 60% said their actual borrowing costs were higher than expected and 4% said they were lower than expected. The corresponding share reporting higher-than-expected costs was 37% for small-bank borrowers and 32% for large-bank borrowers.
Source: 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey; Consumer & Community Context—March 2025: Types of Financing Providers Available to Small Businesses.
Debt costs, guarantees, and financial stress
Debt is only one part of a firm’s financial pressure, but it can become more difficult to manage when costs and cash flow are strained. In the 2024 survey, 75% of U.S. small employer firms cited rising costs of goods, services, or wages as a financial challenge. Fifty-six percent cited paying operating expenses, and 51% cited uneven cash flow.
Thirty-five percent cited making payments on debt or dealing with interest rates as a financial challenge. Among firms denied all or some requested financing in 2024, 41% attributed the denial to having too much debt already. The comparable 2021 figure was 22%. This is an attribution reported by denied firms, not an independent assessment of underwriting decisions.
Firm age also mattered in the 2023 startup-firm survey. Forty percent of startup employer firms cited making debt payments or interest rates as a financial challenge, compared with 33% of older employer firms. Among startup nonemployer firms, 24% cited that challenge. These groups are distinct, so the figures should not be read as a single all-firm rate.
The 2025 survey’s collateral figures help explain why business debt can create personal exposure. Among small employer firms with debt, 59% used a personal guarantee and 51% used business assets to secure it. The data do not quantify the dollar value of guarantees or assets at risk.
Source: 2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey; 2024 Report on Startup Firms: Findings from the 2023 Small Business Credit Survey for New Nonemployer and Employer Firms; 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey.
COVID-era EIDL debt
The COVID-19 Economic Injury Disaster Loan (EIDL) program provided $380 billion in loans to struggling small businesses during 2020–2022. The program’s loans carried a 3.75% interest rate and a 30-year term, with repayment beginning 30 months after proceeds were disbursed.
In the optional EIDL module of the 2023 SBCS, 28% of responding employer firms had an outstanding EIDL balance at the time of the survey. Sixteen percent had received an EIDL loan but no longer had an outstanding balance, while 56% had never received an EIDL loan. The module was optional, so these shares describe the firms answering that module rather than all employer firms.
The long term and delayed repayment schedule helped spread required payments over time, but an outstanding balance could remain a continuing obligation years after the emergency borrowing. The supplied EIDL results do not provide a current average balance, delinquency rate, or total unpaid amount for the surveyed firms.
Source: From Short-Term Relief to Long-Term Hardship: Some Small Businesses Struggle with Debt Burdens from COVID-19 Economic Injury Disaster Loans; 2024 Report on Employer Firms: Findings from the 2023 Small Business Credit Survey.
Business debt in the broader credit market
Small-business survey figures sit inside a much larger U.S. credit market. The Federal Reserve reported $21.407 trillion in total nonfinancial business credit outstanding in 2024 Q2. That total covered both corporate and noncorporate businesses, not only small firms.
The 2024 Q2 components included $13.835 trillion in corporate business credit and $7.571 trillion in noncorporate business credit. Bank lending to U.S. businesses stood at $2.207 trillion. Commercial real estate credit owed by U.S. nonfinancial corporate and noncorporate businesses was $3.196 trillion, while leveraged loans outstanding were $1.354 trillion.
| Broader U.S. business-credit measure | 2024 Q2 amount |
|---|---|
| Total nonfinancial business credit | $21.407 trillion |
| Corporate business credit | $13.835 trillion |
| Noncorporate business credit | $7.571 trillion |
| Bank lending to businesses | $2.207 trillion |
| Commercial real estate credit | $3.196 trillion |
| Leveraged loans outstanding | $1.354 trillion |
These Federal Reserve figures are market-wide credit measures, whereas SBCS statistics are survey estimates for small employer firms. The two perspectives answer different questions: one describes the scale and composition of U.S. nonfinancial business credit, and the other describes how smaller firms borrow, apply, and experience financing conditions. Percentages in the survey results may not sum to 100% because of rounding or multiple-response questions.
Source: The Fed—November 2024 Financial Stability Report: Borrowing by Businesses and Households.