ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Commercial Lending

Fed Survey: Most Small Businesses Lack Cash Reserves to Cover Long-Term Revenue Loss

April 7, 2020
Reading Time: 2 mins read

Seventeen percent of small businesses said that they would have to close down or sell if they experienced two-month loss in revenue, according to the latest Small Business Credit Survey released today by the Federal Reserve Bank of New York. The survey, which was based on responses collected in the third and fourth quarter of 2019, prior to the outbreak of the coronavirus in the U.S., serves as a benchmark for how these firms entered the crisis period and highlights the challenges many were already facing.

Nearly half (47%) of the small business employer firms surveyed said they would use personal funds to float their business through a rough period. They also said they would reduce salaries (37%) take out additional debt (34%), lay off employees (33%), downsize operations (30%) or defer expenses or payments (29%). Just 14% said they would be able to continue normal operations using their cash reserves.

The survey also found that a majority of firms—66%—were facing some type of financial challenge even before the coronavirus pandemic began. Paying operating expenses—including wages—was a challenge for 43% of employer firms, while a third said they were having difficulties securing credit. Thirty percent were struggling to make payments on existing debt, while 19% faced challenges purchasing inventory or supplies to fulfill contracts.

The share of firms that applied for financing remained flat at 43% between 2018 and 2019 and the majority of firms applying during that time (56%) did so in order to expand their business, pursue a new opportunity or acquire business assets. Forty-three percent sought financing to meet operating expenses prior to the coronavirus outbreak.

Large banks received the most credit applications from small businesses (40%) during the survey period, followed by small banks (36%), online lenders (33%), finance companies (18%), credit unions (9%) and CDFIs (3%). Lender satisfaction was highest at small banks (79%), followed by large banks (66%), finance companies (63%) and online lenders (54%).

ADVERTISEMENT
Tags: CoronavirusSmall businessSmall business lendingSurveys
ShareTweetPin

Related Posts

ABA unveils key policy priorities for 2025

Budget bill passed by House includes multiple banking industry priorities

Ag Banking
May 22, 2025

The House narrowly passed a reconciliation budget package with several tax provisions supported by ABA. The legislation next heads to the Senate.

ABA-advocated SAFE Banking Act introduced in House, Senate

House committee advances multiple banking-related bills

Newsbytes
May 22, 2025

The House Financial Services Committee advanced nine bills supported by ABA, covering issues ranging from bank merger applications to regulatory tailoring.

Banker op-ed: Durbin-Marshall credit card bill will hurt small businesses

ABA, state bankers associations: Keep credit card rate cap out of stablecoin bill

Newsbytes
May 22, 2025

A proposed amendment to add a credit card rate cap to an unrelated bill on stablecoin regulation would devastate credit access for millions of consumers and small businesses, the ABA and 52 state bankers associations said.

Culture eats code for breakfast: Rethinking AI strategy for banks

Survey: Majority of financial institutions deploying generative AI

Newsbytes
May 22, 2025

While banks have long employed artificial intelligence tools, a new survey shows that a majority of banks globally have either deployed or are in the process of deploying generative AI tools.

#PracticeSafeChecks campaign wins two Telly Awards

#PracticeSafeChecks campaign wins two Telly Awards

Compliance and Risk
May 21, 2025

An ABA public education campaign warning consumers about the risks of check fraud has received two awards for video and television excellence.

ABA, associations urge Congress to overturn CFPB credit card late fees rule

Proposed amendment would add credit card rate cap to Senate stablecoin bill

Newsbytes
May 21, 2025

A proposed amendment would add language capping credit card interest rates at 10% to the GENIUS Act, an unrelated bill establishing a regulatory framework for payment stablecoins.

NEWSBYTES

Budget bill passed by House includes multiple banking industry priorities

May 22, 2025

House committee advances multiple banking-related bills

May 22, 2025

ABA, state bankers associations: Keep credit card rate cap out of stablecoin bill

May 22, 2025

SPONSORED CONTENT

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

Choosing the Right Account Opening Platform: 10 Key Considerations for Long-Term Success

April 25, 2025
Outsourcing: Getting to Go/No-Go

Outsourcing: Getting to Go/No-Go

April 5, 2025
Six Payments Trends Driving the Future of Transactions

Six Payments Trends Driving the Future of Transactions

March 15, 2025
AI for Banks: A Starter Guide for Community and Regional Institutions

AI for Banks: A Starter Guide for Community and Regional Institutions

March 1, 2025

PODCASTS

Podcast: Accelerating banking for quick-service restaurants

May 8, 2025

How a Georgia community bank supports government-guaranteed lending nationwide

May 1, 2025

Podcast: Quantum computing’s shakeup in payments, cybersecurity

April 24, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.