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Small Business
Community Development Publication

Small Business Credit Survey: 2019 Report on Employer Firms in Texas

August 2019

Emily Ryder Perlmeter

Overview and Key Findings

Small businesses are critical to the U.S. economy, representing 99.9 percent of all businesses in the country.[1] Small employer firms (hereafter “firms”), upon which this report is based, are responsible for two out of three net job gains nationally.[2] Therefore, monitoring challenges and opportunities associated with revenue, financing and hiring for these groups is essential to understanding the U.S. economy.

In 2017, the Federal Reserve Bank of Dallas joined a Federal Reserve System effort to survey small businesses across the country on an annual basis. This report is the second statewide report to come from this collaboration. It draws from the 2018 survey results, focusing on small employers in Texas. It further provides perspectives from community partners on addressing some of the challenges the survey reveals. Key findings include:

Texas firms are optimistic and want to grow

  • Fifty-three percent of firms were profitable at the end of 2017, and 77 percent expect to increase revenues in the next year.
  • Nearly half (49 percent) expect to increase their number of employees over the next 12 months.
  • Most Texas firms (86 percent) prefer their business grow “larger” or “much larger.”

A majority faced at least one financial challenge

  • Sixty-two percent had a financial challenge, with 37 percent pointing to trouble paying operating expenses.
  • Minority-owned firms continued to struggle at higher rates with credit availability than their nonminority-owned peers (37 percent versus 29 percent).
  • Most firms used personal funds to address financing gaps. However, 27 percent made a late debt payment, up from 24 percent last year.
  • Sixty-six percent of firms have outstanding debt. Women-owned firms are much less likely to hold more than $1 million (0.5 percent) in debt, compared with men-owned (12 percent) or equally owned firms (14 percent).
  • Forty-two percent of firms applied for more financing in the survey period, and 42 percent of applicants received all financing for which they applied.

Most firms want to hire—and most have difficulty doing so

  • Three-quarters of Texas firms attempted to hire in the survey period. Just 23 percent looked for candidates with a bachelor’s degree or higher.
  • For firms looking for candidates without bachelor’s degrees, 38 percent said the search was somewhat difficult, and 28 percent said it was very difficult. For those searching for college graduates, 37 percent reported that it was somewhat difficult, and 27 percent said it was very difficult.
  • To cope with hiring difficulties, Texas firms most often increased starting pay or restructured existing employee responsibilities.

The information and views expressed in this report are the author’s and do not necessarily reflect official positions of the Federal Reserve Bank of Dallas or Federal Reserve System; nor do they constitute an endorsement of any organization or program.

Full report is available online:


Federal Reserve Bank of Dallas 2200 N. Pearl St., Dallas, Texas 75201 | 214.922.6000 or 800.333.4460