Small businesses in the U.S. remained upbeat in their outlook for 2024 despite elevated debt burdens and high borrowing rates that limited their access to new credit, a new Federal Reserve survey showed, Bloomberg News reported. The Fed’s 12 regional banks on Thursday released their credit conditions survey of more than 6,000 firms with fewer than 500 employees. Overall, expectations were fairly positive for the remainder of the year, with 57% foreseeing a bump up in revenue and only 19% expecting a drop, according to the annual Small Business Credit Survey conducted last fall. A large minority, 39%, expected to increase employment this year, against 11% who anticipated a reduction. Half of employers said their job count would stay flat. Small business expectations for growth generally tracked increasingly optimistic forecasts. Economists now see just a 40% chance of recession in the next year, down from a peak of 65% in the first half of 2023, according to the latest Bloomberg monthly survey of economists. Still, the report found troubling signs in debt levels and in access to credit. While the proportion of small firms carrying $100,000 or more in debt declined slightly to 39%, that remained well above the 31% recorded in 2019. Among the extra debt, 28% of small businesses had an outstanding balance on their pandemic-era COVID-19 Economic Injury Disaster Loan, the survey said. The EIDL program offered long-term, low-interest loans through the Small Business Administration. Additionally, a rising share of applicants for loans, lines of credit and cash advances saw only partial approvals for funding.
