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last mo.

Small Business Revenue Declines for First Time Since 2021, Fed Reports

The Federal Reserve's latest survey highlights persistent financial and operational struggles for U.S. small businesses as inflation and high interest rates weigh heavily on growth in early 2025.

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Overview

  • The Federal Reserve's 2024 Small Business Credit Survey reveals that 41% of small businesses reported a revenue decline, surpassing those with revenue growth for the first time since 2021.
  • Only 19% of small businesses were classified as 'growing' in 2024, a drop from 22% in the previous two years and far below pre-pandemic levels.
  • Rising costs, including wages and goods, were the most common financial challenge in 2024, cited by 75% of firms, alongside growing concerns over cash flow and tighter margins.
  • Access to credit tightened, with 41% of loan denials attributed to excessive debt, nearly double the share from 2023, prompting many firms to rely on personal funds and credit cards.
  • While supply chain issues eased, challenges such as customer acquisition, high inflation, and uncertainty around new policies under the Trump administration continue to strain small business recovery in 2025.