Using data from the Fed’s Small Business Credit Survey: 2023 Report on Employer Firms, this brief offers a snapshot of business conditions in the states of the Third District (Delaware, New Jersey, and Pennsylvania) in 2022. The short, graphic report illustrates what 1,285 small businesses in the Third District states said about their overall conditions, financing needs, and their top challenges, and makes comparisons with conditions in 2021.

Top operational challenges in the Third District for small business owners according to the Small Business Credit Survey.

More than half had not seen revenue improvements since 2021, while 40 percent saw an increase in revenue. Meanwhile, 65 percent reported that financial conditions were either poor or fair.

As more pandemic assistance programs were phased out in 2022, more than half of the firms did not apply for pandemic-related financial assistance. Still, firms continued to demonstrate demand for funding. More than one-third (36 percent) of the firms applied for nonemergency loans, lines of credit, or merchant cash advances. The most popular of these were lines of credit, business loans, and Small Business Administration loans.

The most widely cited operational challenges were supply chain issues, hiring or retaining qualified staff, and reaching customers or growing sales. The most severe financial challenges cited were increased costs of goods, services, and/or wages; paying operating expenses; and uneven cash flow.

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