June 28, 2022

Latest SBA Statistics Identify both Positive and Negative Trends

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SBA Statistice Released

During 2009 approximately 552,600 new employer firms were established and 660,900 firms went out of business, according to information released by the U.S. Small Business Administration.

The SBA’s Office of Advocacy furnished the latest update to the database of small businesses statistics. According to the SBA, 7 out of 10 new employer firms remain viable for at least two years, 5 out of 10 survive for at least 5 years, one third at least 10 years, and one fourth at least 15 years. Last year, 27.5 million businesses were operating in the United States.

Small businesses depend to a great extent on owner funding and lender credit, averaging approximately $80,000 per year for relatively new companies, the SBA stated. Startups rely on owners’ cash input into the business and credit equally, while newer firms acquire around 75%
of their finances from financial institutions via credit cards, lines of credit and other types of loans. One-tenth of new startups and approximately 1/3  of newer firms do not require capital injections.

Small businesses, typically defined as those with less than 500 employees, were responsible for 9.8 million (65%) of the 15 million new jobs established from 1993 through 2009. A significant portion of this job growth was from fast-growing companies, representing nearly 6% of all businesses and have been open for an average of 25 years.

The SBA, citing Federal Reserve Board data, said that by the middle of 2010, banks started to ease restrictive lending conditions for small companies that had started in early 2007. Credit continues to flow as loans for less than $1 million totaled $695 billion during fiscal year 2009. Ven­ture capital investment funds grew in mid-2010 following declines over the last few years.

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