The 12 Federal Reserve Banks issued the 2016 Small Business Credit Survey: Report on Employer Firms, which examines the results of an annual survey of business conditions and the credit environment faced by small business owners who have full- or part-time employees.

This was the first time the survey was conducted on a national scale, roughly doubling the states represented and tripling the responses from the 2015 survey. The survey gathered experiences from firms across all 50 states and the District of Columbia through the joint efforts of the Federal Reserve Banks of New York, Atlanta, Boston, Chicago, Cleveland, Dallas, Kansas City, Minneapolis, Philadelphia, Richmond, San Francisco and St. Louis.

The Report on Employer Firms found that, although many employer small businesses were profitable and optimistic, a significant majority faced financial challenges, experienced funding gaps and relied on personal finances. These issues were even more pronounced for the smallest firms, which were less likely to receive necessary funding and more likely to rely on personal finances to operate. These findings highlight small businesses' obstacles to growth and raise new questions about how to overcome them.

"Despite their outsized role in the U.S. economy, many small businesses lack the financing necessary to stabilize and grow their businesses," said New York Fed President William C. Dudley. "Supporting access to capital and effective financial management empowers small businesses to thrive in today's evolving economy, so that they can continue driving job growth and innovation."