Federal Reserve Survey Say Small U.S. Firms Are Expanding Their Financing Sources
From 1999-2003, in the United States, the Federal Reserve says that more small business looked to non-banking sources, such as brokerages, finance and leasing companies, venture capitalists, relatives, other individuals, and credit/debit-card processors, for financial services.
Survey results were based on information on 42,400 U.S. firms.
A majority of the firms surveyed were small, owner-managed businesses. More than 80% of the firms surveyed had less than 10 employees.
Survey results show that commercial banks, however, were still the dominant provider of checking accounts, loans, lease financing, and credit lines. Small business also increased their use of “nonstandard work arrangements,” including working with consultants and contractors.
Of the companies surveyed, 47% of small firms registered as corporations (31% were “S” corporations and 16% were “C” corporations).
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