Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances.Small businesses--firms having fewer than 500 employees--are an integral part of the U.S. economy. They account for about half of private-sector output, employ more than half of private-sector workers, and provide about three-fourths Noun 1. three-fourths - three of four equal parts; "three-fourths of a pound" three-quarters common fraction, simple fraction - the quotient of two integers of net new jobs each year.(1) Newly available data from the Survey of Small Business Finances provide a detailed look at these firms--their characteristics and their use of credit and other financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. . The survey is the most comprehensive source of such information; no other source provides the breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is and detail of information for a nationally representative sample of small businesses. Since the first small business survey in 1987, the financial landscape in which these firms operate has changed markedly. Restrictions on interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. branching and banking have been relaxed relaxed, adj freed from tension, being at ease, as applied to muscles and the mind. , and certain financial institutions are now permitted to offer a wider range of financial services. Technological innovations (such as the use of small-business credit-scoring models) and structural changes in the financial services industry (such as consolidation of banking and thrift institutions Thrift institution An organization formed as a depository for primarily consumer savings. Savings and loan associations and savings banks are thrift institutions. ) have also contributed to the alteration Modification; changing a thing without obliterating it. An alteration is a variation made in the language or terms of a legal document that affects the rights and obligations of the parties to it. . By comparing the newest survey data with results from earlier surveys in 1987 and 1993, policymakers and researchers will be able to assess the effects these marketwide changes may have had on the use of financial services by small businesses and on the competitive financial environment in which they operate.(2) The latest survey gathered data for fiscal year 1998 from 3,561 firms selected to be representative of small businesses operating in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in December December: see month. 1998.(3) The data show that in 1998, as in 1987 and 1993, most small businesses were very small (nearly two-thirds had fewer than five employees) and most (nearly four-fifths) were located in urban areas.(4) Ownership characteristics had changed somewhat since 1993--nearly 15 percent were owned by minorities (up from nearly 12 percent in 1993), and more than 24 percent were owned by women (up from nearly 21 percent in 1993). Commercial banks continued to be the supplier most commonly used by small businesses for financial services other than leasing, brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. services, and trust and pension services. Finance companies and leasing companies were also important suppliers of credit and financial management services, especially for the largest firms. The likelihood of using a service increased with firm size, as did the likelihood of using each type of supplier except thrifts and family and individuals. In the 1998 survey, 55 percent of small businesses reported outstanding loans, capital leases, or lines of credit at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. , compared with 59 percent in the 1993 survey. Credit use increased strongly with firm size: About 33 percent of the smallest firms had outstanding loans, capital leases, or lines of credit, compared with about 92 percent of the largest firms. Although the percentage of small businesses with outstanding loans, capital leases, or lines of credit was about the same in 1998 as in 1993, the types of credit used changed somewhat over the intervening in·ter·vene intr.v. in·ter·vened, in·ter·ven·ing, in·ter·venes 1. To come, appear, or lie between two things: You can't see the lake from there because the house intervenes. 2. period: The percentage that had outstanding vehicle loans, equipment loans, trade credit, and other loans declined somewhat, whereas the percentage that had outstanding mortgages or used personal and business credit cards for business purposes increased. The 1998 data are still being edited ed·it tr.v. ed·it·ed, ed·it·ing, ed·its 1. a. To prepare (written material) for publication or presentation, as by correcting, revising, or adapting. b. and are therefore subject to revision (programming) revision - A release of a piece of software which is not a major release or a bugfix, but only introduces small changes or new features. . However, the descriptive findings reported here are likely to be robust.(5) Once the data are final, the database will allow for rigorous analysis that takes into account characteristics of the businesses, their owners, and existing markets. Researchers will be able to study many aspects of small business finance, including, for example, how the proximity PROXIMITY. Kindred between two persons. Dig. 38, 16, 8. of financial institutions affects the mix of financial products the firm uses, which firm and owner characteristics affect the ability of small businesses to obtain credit, and how lending patterns vary with these characteristics.(6) ECONOMIC AND FINANCIAL SERVICES ENVIRONMENT The financial services industry and the economic climate were considerably different in 1998 than in 1993. Over the period between the surveys, the intense consolidation activity that had begun early in the decade reduced the number of financial institutions operating in the United States more than 20 percent.(7) Indeed, three of the largest bank consolidations to that point--BankAmerica and NationsBank NationsBank was one of the largest banking corporations in the United States, based in Charlotte, North Carolina. In 1998, it acquired BankAmerica to become Bank of America. , Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. and Norwest For the sniper, see .
Norwest Corporation , and Banc One and First Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. NBD--occurred in 1998. Cross-industry merger activity was also strong over the period as the traditional boundaries Natural or artificial separations or divisions between adjoining properties that show their limits. Boundaries are used to establish private and public ownership by determining the exact location of the points at which one piece of land is distinguishable from another. between three important types of firms that make up the financial services industry--depository institutions, securities firms, and insurance companies--continued to erode Erode (ĕrōd`), city (1991 urban agglomeration pop. 361,755), Tamil Nadu state, S India, on the Kaveri River. The city is located in a cotton-growing region, and its industries include cotton ginning and the manufacture of transport equipment. . A notable example was the 1998 merger between Citicorp, a bank holding company, and Travelers, an insurance and securities firm.(8) In 1998, the economy was in the seventh year of a sustained economic expansion. Unemployment was just under 5 percent, the consumer price index (CPI (1) (Characters Per Inch) The measurement of the density of characters per inch on tape or paper. A printer's CPI button switches character pitch. (2) (Counts Per I ) rose 1.6 percent, the gross domestic product (GDP GDP (guanosine diphosphate): see guanine. ) grew 4.4 percent, and productivity in the business sector increased 2.7 percent. In 1993, the economy was in the early stages of an expansion following two years of recession; unemployment was nearly 7 percent, the CPI and GDP each increased 2.7 percent, and business-sector productivity grew just one-half of 1 percent.(9) According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the 1998 survey, labor issues (the quality, cost, and availability of labor) were the greatest concern for small businesses, particularly among the largest firms (table 1). Another commonly mentioned concern was competition from larger, international, or Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the firms. Other important problems--although mentioned less often--were financing and interest rates, government regulations, taxes, and poor sales.
1. Most important problem facing small business in 1998,
distributed by size of business
Percent
Number of employees(1)
Problem
9 or fewer 10-49 50-499
Competition (from larger,
international, or Internet
companies) 11.0 12.5 12.3
Quality of labor 10.1 24.3 25.2
Cost or availability of labor 3.2 6.5 12.6
Poor sales 7.6 6.4 7.3
Financing and interest rates 6.9 6.4 3.7
Government regulations and
red tape 6.9 5.9 8.0
Taxes 7.2 5.8 3.3
Other 47.1 32.2 27.6
NOTE. In this and subsequent tables, unless otherwise noted,
the data are weighted to adjust for differences in sampling and
response rates; the weighted data reflect population rather than
sample measures. See the appendix for more information.
Also in this and subsequent tables, distributions may not sum to
100 percent because of rounding or because, in a few cases, values
for some variables are missing.
(1.) Sum of number of owners working in the business and number of
employees (full- and part-time) working in the business.
The primary concerns of small businesses were markedly different in 1993.(10) In that survey, health care and health insurance were cited most often, followed by general U.S. business conditions--two issues that received much less attention in 1998. The other problems mentioned most frequently in 1993 were financing and interest rates; profits, cash flow, expansion, and sales; and taxes. CHARACTERISTICS OF SMALL BUSINESSES Along with information on the availability and use of credit and other financial services by small businesses, the 1998 Survey of Small Business Finances collected information on firm characteristics, including number of employees; number of owners; organizational form; location; use of computers; standard industrial classification; credit history; sex, race, and ethnicity ethnicity Vox populi Racial status–ie, African American, Asian, Caucasian, Hispanic of the owner(s) with the majority share of the firm; and income and balance sheet data.(11) Also collected was information on each firm's primary owner (defined as the owner with the largest ownership share if the firm had more than one owner), including age, education, experience in business, ownership share, credit history, personal net worth, home ownership, and home equity. Business size is measured in three ways: number of employees, fiscal year sales, and year-end assets. In terms of employment, most small businesses in 1998 were very small: About 64 percent had fewer than five employees, and just over 83 percent had fewer than ten employees (table 2).(12) In terms of sales Terms of sale Conditions under which a firm proposes to sell its goods or services for cash or credit. and assets, the businesses were similarly small: About 40 percent had fiscal year sales of less than $100,000, and just over 61 percent had year-end assets of less than $100,000. This general pattern is similar to findings from the 1993 survey.
2. Number and proportion of population of small businesses
in survey sample, distributed by selected category of firm,
1998
MEMO:
Number Percentage 1993
in of percentage
Category sample(1) population of
population(2)
All firms 3,561 100.00 100.00
Number of employees(3)
0-1 607 21.86 18.18
2-4 1,173 41.78 38.75
5-9 584 19.78 22.89
10-19 281 8.39 10.74
20-49 366 5.47 6.16
50-99 284 1.55 2.14
100-499 261 1.17 1.14
Fiscal year sales
(thousands of dollars)
Less than 25 478 16.34 10.94
25-49 271 9.48 8.50
50-99 419 14.22 12.52
100-249 598 21.72 24.68
250-499 399 13.29 15.72
500-999 329 10.27 11.85
1,000-2,499 361 7.83 8.36
2,500-4,999 232 3.28 3.56
5,000-9,999 175 1.56 1.96
10,000 or more 292 1.79 1.91
End-of-year assets
(thousands of dollars)
Less than 25 1,007 34.72 29.24
25-49 360 12.57 13.96
50-99 413 13.94 14.30
100-249 498 15.86 17.63
250-499 302 8.74 10.45
500-999 253 5.99 6.35
1,000-2,499 279 4.22 4.61
2,500-4,999 159 1.54 1.80
5,000 or more 257 1.51 1.66
Organizational form
Proprietorship 1,429 49.35 43.22
Partnership 226 6.95 8.01
S corporation 1,019 23.87 20.33
C corporation 887 19.83 28.44
Standard industrial
classification
Construction and
mining (10-19) 376 11.87 14.18
Primary manufacturing (20-29) 172 3.66 3.90
Other manufacturing (30-39) 217 4.68 4.16
Transportation (40-49) 144 3.72 2.77
Wholesale trade (50-51) 247 7.15 8.46
Retail trade (52-59) 704 18.95 21.70
Insurance agents and
real estate (60-69) 213 6.48 7.09
Business services (70-79) 832 24.83 21.15
Professional services (80-89) 650 18.46 16.59
Years under current ownership
0-4 730 22.37 14.74
5-9 745 22.79 28.46
10-14 683 19.14 19.16
15-19 486 13.05 14.40
20-24 331 8.72 8.68
25 or more 579 13.75 14.55
MEMO:
Number Percentage 1993
in of percentage
Category sample(1) population of
population(2)
Census region of main office
Northeast 595 18.90 22.31
New England 155 5.21 6.94
Middle Atlantic 440 13.69 15.37
Midwest 770 21.80 24.13
East North Central 485 14.56 15.96
West North Central 285 7.24 8.17
South 1,225 32.71 29.48
South Atlantic 641 16.88 14.84
East South Central 202 5.47 4.55
West South Central 382 10.35 10.09
West 971 26.59 24.08
Mountain 238 6.63 5.81
Pacific 733 19.96 18.27
Urbanization at main office
Urban 2,782 79.91 78.88
Rural 779 20.09 21.12
Number of offices
One 2,839 87.75 84.35
Two 379 8.55 10.73
Three or more 341 3.63 4.92
Sales area
Primarily within U.S. 3,355 95.43 ...
International or global 204 4.51 ...
Owners' participation
Owner management 3,188 92.33 86.00
Hired management 369 7.52 14.00
Race, ethnicity, and sex
of majority owners
Nonwhite or Hispanic 756 14.60 11.62
Non-Hispanic white 2,790 84.88 88.38
White 3,033 90.12 92.52
Black 273 4.12 2.91
Asian or Pacific Islander 214 4.38 3.44
American Indian or
Alaska Native 24 0.81 1.13
Hispanic 260 5.59 4.27
Non-Hispanic 3,292 94.10 95.73
Female 796 24.32 20.61
Male 2,609 71.88 73.92
Ownership equally divided
by sex 147 3.67 5.47
(1.) Numbers are unweighted. For some categories, numbers in sample
do not sum to the sample total because some firms responded "Do not
know" or declined to respond.
(2.) The percentages reported here are final data and may differ
slightly from the preliminary data for 1993 reported in Cole and
Wolken, "Financial Services Used by Small Businesses," 1995.
(3.) Number of owners working in the business plus number of
full- and part-time employees. For the 1993 and 1987 surveys, the
number of employees was calculated as the sum of owners working in
the business plus full-time employees plus one-half of part-time
employees; in the 1998 survey, no differentiation was made between
full- and part-time employees. To make the data for 1998 and 1993
comparable, the 1993 numbers have been recalculated as the sum of
owners working in the business, full-time employees, and part-time
employees; therefore, the numbers presented here differ from those
reported in Cole and Wolken, "Financial Services Used by Small
Businesses," 1995.
... Question not asked in 1993.
A business may organize organize /or·ga·nize/ (or´gan-iz) 1. to provide with an organic structure. 2. to form into organs. or·gan·ize v. 1. as a corporation (S-type S-Type is either:
A person who does business for himself is engaged in the operation of a sole proprietorship. .(13) In 1998, the most common organizational form for small businesses was the sole proprietorship, accounting for nearly 50 percent of the firms. About 24 percent were organized as S corporations, about 20 percent as C corporations, and only 7 percent as partnerships. The primary activity of 43 percent of the businesses (as classified according to the standard industrial classification (SIC) system used by the U.S. government) was business or professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. . An additional 19 percent were in retail trade. Just over 22 percent of the firms had been in business under at least one of the current owners for less than five years (firm age less than five years), and another 23 percent had been in business five to nine years. More than 22 percent had been in business twenty years TWENTY YEARS. The lapse of twenty years raises a presumption of certain facts, and after such a time, the party against whom the presumption has been raised, will be required to prove a negative to establish his rights. 2. or more. Average firm age (not shown in the table) was 13.3 years, slightly less than the average firm age in 1993 of 14.5 years. The firms were dispersed dis·perse v. dis·persed, dis·pers·ing, dis·pers·es v.tr. 1. a. To drive off or scatter in different directions: The police dispersed the crowd. b. across the country, with nearly 19 percent located in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. , about 27 percent in the West, almost 22 percent in the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians , and nearly 33 percent in the South. The vast majority (nearly 80 percent) had their main offices in urban areas, and the primary sales area for nearly all firms (more than 95 percent) was the United States. Race, Ethnicity, and Sex of Majority Owners A firm was classified as being owned by individuals of a specific race, ethnic group, or sex if more than 50 percent of the firm was owned by such individuals. About 15 percent of small businesses in 1998 were minority-owned (that is, owned by nonwhite non·white n. A person who is not white. non  white adj. or Hispanic Hispanic Multiculture A person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race Social medicine Any of 17 major Latino subcultures, concentrated in California, Texas, Chicago, Miam, NY, and elsewhere individuals),
compared with about 12 percent in 1993. Between 1993 and 1998, the
proportion of black-owned firms increased from about 3 percent to about
4 percent. Over the same period, the proportion of Hispanic-owned firms
increased from 4 percent to 6 percent and the proportion of Asian-owned
firms, from 3 percent to 4 percent. Ownership by American Indians American Indians: see Americas, antiquity and prehistory of the; Natives, Middle American; Natives, North American; Natives, South American. or
Alaska Natives Alaska Natives are indigenous peoples of the Americas native to the state of Alaska within the United States. They include Inupiat, Yupik, Aleut, and several Native American peoples, including Tlingit, Haida, Tsimshian, Eyak, and a number of Northern Athabaskan peoples. remained at about 1 percent.(14)The proportion of finns n. pl. 1. (Ethnol.) Natives of Finland; Finlanders. that were more than 50 percent owned by men declined somewhat, from about 74 percent in 1993 to about 72 percent in 1998, and the proportion that were more than 50 percent owned by women rose from about 21 percent to about 24 percent. The proportion equally owned by men and women fell nearly 2 percentage points, to 4 percent. The survey data suggest that female- and minority-owned finns share some characteristics that distinguish them from male- 1. See Mal-. and white-owned firms (table A. 1). By all three measures of size, female- and minority-owned firms appear to be smaller than male- and white-owned finns. They also appear to be younger, more likely to be sole proprietorships, and less likely to be corporations. These differences are similar to the findings in 1993. The differences in organizational type may simply reflect that minority-owned and female-owned finns tend to be younger and smaller than non-minority-owned and male-owned firms--and younger and smaller finns are more likely to organize as sole proprietorships or partnerships rather than as corporations. Computer Use within the Firm More than three-fourths of the finns used computers in their businesses in 1998 (table 3) (this question was not asked in the earlier surveys). Use varied somewhat by size, with larger finns being more likely than smaller finns to use computers. For example, 89 percent of finns with more than four employees used computers for business purposes, compared with 71 percent of finns with four or fewer employees. Similarly, 86 percent of finns with sales of $100,000 or more used computers, compared with 63 percent with sales of less than $100,000. Finns used computers for a variety of purposes: 59 percent used them to access the Internet; about 15 percent for banking; and about 74 percent for inventory management or bookkeeping bookkeeping, maintenance of systematic and convenient records of money transactions in order to show the condition of a business enterprise. The essential purpose of bookkeeping is to reveal the amounts and sources of the losses and profits for any given period. .
3. Percentage of small businesses that used computers,
by selected category of firm, 1998
Category Used Used computers for specific tasks(2)
computers
Internet/ Banking Administration
WWW access
All firms 76.3 59.0 15.2 73.9
Number of
employees(1)
0-4 70.8 53.8 13.6 68.0
5 or more 88.5 70.6 18.8 86.8
Fiscal year
sales (thousands
of dollars)
Less than 100 62.7 48.1 11.6 60.3
100 or more 85.6 66.6 17.7 83.2
End-of-year
assets (thousands
of dollars)
Less than 100 70.6 54.0 12.7 68.0
100 or more 85.6 67.2 19.2 83.7
Years under
current ownership
0-4 78.4 62.7 16.7 75.9
5-9 78.6 64.1 16.6 75.7
10 or more 74.4 55.6 14.1 72.2
(1.) See table 1, note 1.
(2.) Firms were given a list of tasks and asked to check all
that applied.
TYPES OF FINANCIAL SERVICES USED BY SMALL BUSINESSES Businesses were asked which of thirteen financial services they used at up to twenty different institutions.(15) The services can be grouped into several categories: liquid asset services (business checking or savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: ); credit lines, loans, and capital leases (lines of credit, mortgages, motor vehicle loans, equipment loans, capital leases, and "other" loans); and financial management services (transaction, cash-management, credit-related, brokerage, and trust and pension services). Owner loans, credit cards, and trade credit are discussed separately and are not included in the tabulations for "any financial service," as no information was collected about the providers of these financial services. Any Financial Service Nearly all small businesses (about 96 percent) used at least one financial service in 1998, essentially the same finding (97 percent) as in 1993 (table 4). In general, use increased with firm size, and almost all firms with five or more employees, or with sales or assets of at least $250,000, used some financial service during the year. About 9 percent of firms with fewer than two employees used no financial service in 1998.
4. Percentage of small businesses using selected financial services,
by selected category of firm, 1998
A. Any service; liquid asset accounts; and credit lines, loans, and
capital leases
Liquid asset accounts(2)
Any
Category service(1) Any Checking Savings
All firms, 1998 96.18 94.43 94.04 22.20
All firms, 1993 97.03 96.21 95.81 24.35
Number of
employees(4)
0-1 91.02 86.41 85.33 16.37
2-4 95.86 94.34 94.10 19.45
5-9 99.37 99.05 98.79 23.38
10-19 100.00 99.86 99.86 35.86
20-49 100.00 100.00 100.00 36.01
50-99 100.00 97.77 97.77 30.07
100-499 100.00 100.00 100.00 36.87
Fiscal year sales
(thousands of
dollars)
Less than 25 82.99 76.62 74.96 11.84
25-49 94.77 91.64 91.12 17.12
50-99 97.97 97.07 96.96 18.10
100-249 99.34 98.29 98.29 19.06
250-499 99.82 99.75 99.75 23.36
500-999 99.57 99.57 99.07 30.26
1,000-2,499 100.00 100.00 100.00 37.58
2,500-4,999 100.00 99.03 99.03 45.48
5,000-9,999 100.00 99.09 99.09 37.56
10,000 or more 100.00 100.00 100.00 36.71
End-of-year assets
(thousands of
dollars)
Less than 25 89.87 86.55 85.77 12.24
25-49 98.65 96.81 96.69 19.57
50-99 99.68 99.31 98.96 20.53
100-249 99.46 98.40 98.40 28.81
250-499 100.00 100.00 99.41 33.64
500-999 100.00 99.40 99.40 36.44
1,000-2,499 100.00 98.79 98.79 36.02
2,500-4,999 100.00 100.00 100.00 37.45
5,000 or more 100.00 100.00 100.00 45.29
Organizational form
Proprietorship 93.16 89.94 89.16 18.23
Partnership 95.37 95.24 95.24 18.75
S corporation 99.85 99.56 99.56 24.68
C corporation 99.58 99.15 99.15 30.33
Standard industrial
classification
Construction and
mining (10-19) 97.11 96.13 96.04 20.63
Primary manufacturing
(20-29) 95.49 92.87 92.87 19.79
Other manufacturing
(30-39) 94.15 91.98 91.98 23.79
Transportation
(40-49) 98.60 98.23 98.23 23.56
Wholesale trade
(50-51) 99.12 96.71 96.71 21.36
Retail trade (52-59) 96.84 95.85 95.75 18.45
Insurance agents and
real estate
(60-69) 96.61 96.13 96.13 25.40
Business services
(70-79) 94.48 92.41 91.18 22.82
Professional services
(80-89) 96.04 93.23 92.95 25.47
Years under current
ownership
0-4 94.50 93.25 92.85 15.38
5-9 96.05 93.61 93.34 20.87
10-14 96.59 94.75 93.93 25.74
15-19 98.45 96.76 96.61 26.31
20-24 98.03 97.23 97.23 23.07
25 or more 95.19 93.22 92.79 26.06
Census region of
main office
Northeast 95.81 92.85 92.22 20.36
New England 94.67 92.95 92.11 23.59
Middle Atlantic 96.24 92.82 92.26 19.13
Midwest 96.48 95.04 94.64 23.47
East North Central 96.54 95.58 94.98 22.88
West North Central 96.36 93.96 93.96 24.66
South 96.05 94.24 94.02 16.10
South Atlantic 96.43 94.12 94.03 14.26
East South Central 96.51 95.54 95.54 16.69
West South Central 95.18 93.74 93.19 18.78
West 96.37 95.29 94.88 29.98
Mountain 97.25 96.82 96.82 22.42
Pacific 96.08 94.79 94.24 32.50
Urbanization at main
office
Urban 96.45 94.76 94.34 22.30
Rural 95.12 93.13 92.86 21.82
Number of offices
One 95.68 93.75 93.37 21.10
Two 100.00 99.37 98.77 30.89
Three or more 99.13 99.13 99.13 28.76
Sales area
Primarily within
U.S. 96.10 94.42 94.01 22.19
International or
global 97.81 94.60 94.60 22.88
Owners' participation
Owner management 95.93 94.10 93.68 22.16
Hired management 99.16 98.40 98.40 22.74
Race, ethnicity,
and sex of
majority owners
Nonwhite or Hispanic 93.86 92.02 91.61 16.83
Non-Hispanic white 96.56 94.86 94.48 23.14
White 96.37 94.67 94.31 22.95
Black 91.33 88.39 87.24 13.22
Asian or Pacific
Islander 97.50 96.20 95.92 17.90
American Indian or
Alaska Native 92.67 92.67 92.67 10.71(*)
Hispanic 92.95 91.33 91.33 19.58
Non-Hispanic 96.36 94.64 94.23 22.37
Female 91.85 90.32 89.92 23.57
Male 97.53 95.63 95.23 21.68
Ownership equally
divided by sex 98.34 98.02 98.02 23.15
Credit lines, loans, and capital leases
Category Any Credit Mortgage Vehicle
line
All firms, 1998 55.09 27.71 13.29 20.55
All firms, 1993 59.13 25.71 7.83 25.28
Number of
employees(4)
0-1 32.79 13.42 6.55 12.80
2-4 49.80 20.83 12.45 16.89
5-9 68.53 34.08 16.21 26.92
10-19 78.01 50.59 19.89 32.63
20-49 83.84 59.07 21.10 31.98
50-99 86.87 62.67 26.25 34.47
100-499 92.04 74.81 18.84 29.85
Fiscal year sales
(thousands of
dollars)
Less than 25 26.76 9.11 7.93 5.80
25-49 33.47 11.25 7.65 14.92
50-99 45.94 15.20 9.69 14.02
100-249 56.25 22.48 14.70 19.98
250-499 67.09 36.82 13.04 25.89
500-999 74.02 41.74 18.64 30.49
1,000-2,499 78.34 51.48 21.15 37.15
2,500-4,999 94.59 68.80 22.65 37.26
5,000-9,999 88.68 75.74 16.52 37.91
10,000 or more 88.95 81.36 18.87 30.22
End-of-year assets
(thousands of
dollars)
Less than 25 32.64 11.35 6.28 10.47
25-49 49.60 22.83 6.79 19.63
50-99 60.06 25.25 10.05 21.80
100-249 67.85 34.61 17.46 26.42
250-499 71.65 40.97 22.65 28.90
500-999 88.54 56.01 33.86 33.70
1,000-2,499 81.15 55.84 25.03 33.48
2,500-4,999 93.09 81.32 26.18 31.71
5,000 or more 95.66 76.01 31.16 38.77
Organizational form
Proprietorship 45.66 18.51 12.44 16.11
Partnership 61.18 27.69 19.07 19.43
S corporation 65.00 37.89 13.91 25.32
C corporation 64.50 38.35 12.65 26.23
Standard industrial
classification
Construction and
mining (10-19) 66.76 31.98 12.07 38.15
Primary manufacturing
(20-29) 56.49 32.10 8.66 16.31
Other manufacturing
(30-39) 60.15 35.87 6.85 19.47
Transportation
(40-49) 62.13 29.70 10.85 28.82
Wholesale trade
(50-51) 64.28 47.26 12.15 27.85
Retail trade (52-59) 54.11 25.19 17.45 17.87
Insurance agents and
real estate
(60-69) 59.77 26.90 24.81 16.63
Business services
(70-79) 49.53 22.41 12.12 18.16
Professional services
(80-89) 47.99 23.86 10.97 13.39
Years under current
ownership
0-4 51.14 19.63 11.95 18.51
5-9 55.79 26.87 10.91 18.08
10-14 56.18 30.88 14.01 23.87
15-19 58.90 33.24 16.06 22.00
20-24 57.86 29.51 17.43 23.73
25 or more 53.09 31.37 13.02 19.46
Census region of
main office
Northeast 52.57 26.10 12.90 18.21
New England 54.33 22.14 12.33 20.97
Middle Atlantic 51.90 27.60 13.12 17.16
Midwest 59.19 29.19 15.48 21.74
East North Central 57.45 28.15 14.53 22.22
West North Central 62.70 31.29 17.38 20.77
South 54.56 28.82 12.50 21.66
South Atlantic 53.90 29.49 11.71 21.69
East South Central 61.63 34.63 18.09 19.35
West South Central 51.89 24.64 10.84 22.83
West 54.16 26.27 12.75 19.86
Mountain 55.43 22.44 17.90 24.84
Pacific 53.74 27.54 11.04 18.21
Urbanization at main
office
Urban 54.00 27.81 11.16 20.41
Rural 59.42 27.28 21.76 21.09
Number of offices
One 52.74 25.43 12.65 19.74
Two 67.60 41.08 16.42 24.23
Three or more 81.61 51.22 21.75 30.36
Sales area
Primarily within
U.S. 55.13 27.29 13.60 20.66
International or
global 53.46 36.65 6.92 17.09
Owners' participation
Owner management 53.75 26.87 12.72 19.90
Hired management 70.60 37.78 20.02 27.81
Race, ethnicity,
and sex of
majority owners
Nonwhite or Hispanic 49.45 20.43 12.67 16.83
Non-Hispanic white 56.11 28.96 13.36 21.25
White 55.92 28.49 13.34 20.99
Black 48.24 18.64 11.61 14.56
Asian or Pacific
Islander 46.41 22.54 11.84 16.35
American Indian or
Alaska Native 51.04(*) 16.83(*) 18.89(*) 32.78(*)
Hispanic 52.74 20.98 13.53 16.30
Non-Hispanic 55.18 28.02 13.26 20.82
Female 46.13 18.42 12.76 13.56
Male 57.39 30.33 12.94 22.61
Ownership equally
divided by sex 68.42 38.40 22.63 25.90
Credit lines, loans,
and capital leases
Category Equipment Capital Other(3)
lease
All firms, 1998 10.18 10.59 9.92
All firms, 1993 14.84 10.25 12.74
Number of
employees(4)
0-1 3.77 3.29 5.82
2-4 8.25 7.42 9.35
5-9 14.52 14.26 9.19
10-19 13.97 23.19 14.67
20-49 22.96 21.71 20.14
50-99 20.25 31.75 20.86
100-499 24.69 27.71 22.81
Fiscal year sales
(thousands of
dollars)
Less than 25 2.37(*) 2.82(*) 6.41
25-49 3.70(*) 2.36(*) 3.36(*)
50-99 5.76 7.73 8.96
100-249 11.50 11.31 10.29
250-499 12.00 11.29 11.31
500-999 16.45 19.81 10.44
1,000-2,499 16.30 17.81 17.79
2,500-4,999 23.68 18.60 12.40
5,000-9,999 20.26 24.77 22.35
10,000 or more 25.40 23.67 17.62
End-of-year assets
(thousands of
dollars)
Less than 25 4.77 5.23 5.00
25-49 6.27 8.21 6.43
50-99 9.70 10.30 12.26
100-249 15.55 12.67 13.50
250-499 12.41 13.97 11.57
500-999 18.32 21.23 19.72
1,000-2,499 20.69 18.87 13.65
2,500-4,999 20.78 34.42 17.00
5,000 or more 30.75 22.26 17.22
Organizational form
Proprietorship 7.13 6.52 8.20
Partnership 13.10 12.92 9.54
S corporation 12.41 14.75 11.53
C corporation 14.05 14.90 12.38
Standard industrial
classification
Construction and
mining (10-19) 11.93 8.27 10.52
Primary manufacturing
(20-29) 19.82 20.05 17.36
Other manufacturing
(30-39) 15.30 14.08 17.10
Transportation
(40-49) 14.16 14.92 12.61
Wholesale trade
(50-51) 9.81 10.47 10.47
Retail trade (52-59) 7.66 6.39 10.26
Insurance agents and
real estate
(60-69) 11.53 9.97 8.94
Business services
(70-79) 8.85 10.60 7.73
Professional services
(80-89) 9.16 13.13 8.51
Years under current
ownership
0-4 10.62 8.90 11.18
5-9 10.48 11.95 11.14
10-14 9.32 12.10 7.02
15-19 12.12 11.32 12.50
20-24 8.95 10.93 11.33
25 or more 9.23 7.85 6.61
Census region of
main office
Northeast 8.39 10.99 10.42
New England 7.70 11.88 12.58
Middle Atlantic 8.65 10.66 9.60
Midwest 11.52 9.45 10.70
East North Central 10.99 10.99 10.74
West North Central 12.58 6.37 10.62
South 10.59 10.58 8.65
South Atlantic 10.36 10.81 9.13
East South Central 15.00 16.31 7.75
West South Central 8.61 7.17 8.35
West 9.85 11.25 10.47
Mountain 11.59 14.44 15.80
Pacific 9.27 10.19 8.70
Urbanization at main
office
Urban 9.57 10.97 8.97
Rural 12.61 9.07 13.67
Number of offices
One 9.09 9.78 9.28
Two 19.22 14.79 12.17
Three or more 15.30 19.20 20.26
Sales area
Primarily within
U.S. 10.30 10.45 9.90
International or
global 7.29 12.67 10.04
Owners' participation
Owner management 9.91 10.24 9.79
Hired management 13.71 14.12 11.59
Race, ethnicity,
and sex of
majority owners
Nonwhite or Hispanic 7.52 10.48 9.23
Non-Hispanic white 10.69 10.60 10.02
White 10.71 10.52 9.93
Black 6.49 13.77 11.45
Asian or Pacific
Islander 5.01 8.39 9.12
American Indian or
Alaska Native 4.31(*) 11.89(*) 3.98(*)
Hispanic 10.31 8.92 8.82
Non-Hispanic 10.20 10.66 9.95
Female 6.41 8.07 9.72
Male 11.40 11.43 9.84
Ownership equally
divided by sex 10.37 11.16 12.99
B. Financial management services
Financial management services(5)
Category
Any Trans- Cash Credit-
action manage- related
ment
All firms, 1998 49.81 41.07 5.21 3.09
All firms, 1993 36.54 24.16 5.13 4.62
Number of employees(4)
0-1 34.49 28.07 1.57(*) 1.42(*)
2-4 43.81 35.73 2.75 1.45
5-9 60.54 53.18 4.00 3.66
10-19 68.69 54.29 11.94 7.93
20-49 73.98 58.99 16.61 7.23
50-99 76.83 56.79 26.95 13.21
100-499 84.75 70.21 50.83 15.37
Fiscal year sales
(thousands of dollars)
Less than 25 29.31 25.71 2.42(*) .95(*)
25-49 36.67 31.24 .95(*) .72(*)
50-99 37.64 32.24 .95(*) .91(*)
100-249 49.67 39.90 2.23(*) 1.22(*)
250-499 58.64 46.64 5.04 4.57
500-999 63.58 59.04 5.39 4.98(*)
1,000-2,499 71.11 51.88 12.63 6.36
2,500-4,999 78.64 63.69 18.42 6.19
5,000-9,999 83.30 64.74 29.95 14.21
10,000 or more 89.97 67.33 45.77 23.83
End-of-year assets
(thousands of dollars)
Less than 25 33.96 29.33 1.31(*) .69(*)
25-49 45.40 36.85 .98(*) .46(*)
50-99 52.66 43.07 3.65 2.75(*)
100-249 58.29 49.52 5.96 3.96
250-499 64.83 53.17 6.75 2.83(*)
500-999 64.31 49.92 7.69 6.64
1,000-2,499 74.13 56.43 16.89 11.88
2,500-4,999 85.79 69.11 37.03 15.40
5,000 or more 87.93 62.25 52.27 17.27
Organizational form
Proprietorship 39.78 33.24 1.94 1.48
Partnership 46.44 43.02 3.83 5.78
S corporation 59.93 48.89 9.31 4.47
C corporation 63.79 50.46 8.89 4.48
Standard industrial
classification
Construction and mining 35.71 27.49 6.42 5.39
Primary manufacturing
(20-29) 52.83 44.70 6.90 5.77
Other manufacturing (30-39) 53.83 42.92 8.39 8.43
Transportation (40-49) 50.14 43.90 5.04 3.26(*)
Wholesale trade (50-51) 58.53 46.60 6.01 10.42
Retail trade (52-59) 57.92 55.63 3.65 1.69
Insurance agents and
real estate (60-69) 38.45 26.03 7.93 2.56(*)
Business services (70-79) 47.19 40.75 4.25 1.45
Professional services
(80-89) 53.07 36.64 4.97 .68(*)
Years under current
ownership
0-4 46.59 40.22 4.13 2.71
5-9 48.75 40.71 4.27 2.37
10-14 53.22 44.02 6.06 3.03
15-19 51.42 40.79 5.67 3.99
20-24 52.05 43.90 6.24 2.60
25 or more 49.03 37.20 6.30 4.41
Census region of main
office
Northeast 48.22 36.52 3.92 2.21
New England 53.59 42.04 4.43 2.36(*)
Middle Atlantic 46.18 34.42 3.73 2.16
Midwest 52.95 42.63 6.86 3.77
East North Central 54.38 45.10 7.07 2.63
West North Central 50.07 37.66 6.42 6.04
South 48.22 40.56 5.86 3.59
South Atlantic 50.82 41.61 6.28 3.60
East South Central 48.32 38.78 6.13 5.97(*)
West South Central 43.93 39.79 5.05 2.30
West 50.33 43.64 3.96 2.53
Mountain 50.31 45.03 5.10 3.21(*)
Pacific 50.34 43.18 3.58 2.31
Urbanization at main office
Urban 50.80 41.81 5.41 2.76
Rural 45.89 38.11 4.40 4.39
Number of offices
One 47.34 39.08 4.17 2.45
Two 67.01 53.96 9.66 8.14
Three or more 70.10 59.67 19.83 6.69
Sales area
Primarily within U.S. 49.15 40.30 5.13 2.74
International or global 64.24 57.58 6.84 10.36
Owners' participation
Owner management 48.59 40.17 4.79 3.00
Hired management 64.41 51.98 10.47 4.22
Race, ethnicity, and sex
of majority owners
Nonwhite or Hispanic 46.84 41.04 2.75 3.07
Non-Hispanic white 50.30 41.04 5.66 3.10
White 49.41 40.36 5.54 3.08
Black 42.23 36.70 2.01(*) 1.86(*)
Asian or Pacific Islander 67.92 62.83 2.86(*) 4.03(*)
American Indian or Alaska
Native 37.86(*) 25.97(*) .32(*) 6.11(*)
Hispanic 35.66 29.54 3.40(*) 2.60(*)
Non-Hispanic 50.68 41.75 5.33 3.12
Female 46.98 39.91 3.00 1.64
Male 50.37 41.17 5.67 3.52
Ownership equally divided
by sex 55.88 44.91 10.58 4.04(*)
Financial management MEMO:
services(5) Other
Credit
Category
Brokerage Trust Loan
and from
pension owner(6)
All firms, 1998 4.34 12.62 28.12
All firms, 1993 4.37 10.52 30.91
Number of employees(4)
0-1 2.67 5.60 17.49
2-4 3.21 9.01 26.25
5-9 4.90 12.49 27.47
10-19 8.63 24.78 34.24(*)
20-49 8.94 32.81 33.69
50-99 8.80 45.08 36.02
100-499 7.95 50.51 28.76
Fiscal year sales
(thousands of dollars)
Less than 25 1.11(*) 1.81(*) 21.36
25-49 2.84(*) 5.57 17.77
50-99 1.21(*) 6.13 26.19
100-249 4.41 10.81 29.12
250-499 5.16 15.18 30.08
500-999 4.62 12.82 31.86
1,000-2,499 11.19 27.49 26.82
2,500-4,999 9.69 37.70 25.74
5,000-9,999 11.74 45.43 34.98
10,000 or more 12.23 62.83 29.26
End-of-year assets
(thousands of dollars)
Less than 25 1.33(*) 5.00 20.55
25-49 4.00(*) 9.08 26.00
50-99 4.04 11.98 33.22
100-249 5.05 14.55 31.08
250-499 5.74 14.75 29.37
500-999 9.75 23.13 30.03
1,000-2,499 11.23 34.67 32.35
2,500-4,999 13.69 42.24 31.72
5,000 or more 14.53 59.16 27.30
Organizational form
Proprietorship 2.78 7.63 ...
Partnership 2.90(*) 8.90 13.10
S corporation 5.73 15.68 30.45
C corporation 7.03 22.69 30.57
Standard industrial
classification
Construction and mining 5.40 8.36 27.61
Primary manufacturing
(20-29) 4.20(*) 11.96 45.49
Other manufacturing (30-39) 6.36(*) 19.23 34.53
Transportation (40-49) 3.57(*) 8.42 25.74
Wholesale trade (50-51) 4.13 18.76 29.66
Retail trade (52-59) 2.15 5.63 28.36
Insurance agents and
real estate (60-69) 3.23(*) 11.32 24.13
Business services (70-79) 3.50 9.29 26.91
Professional services
(80-89) 7.19 24.54 24.76
Years under current
ownership
0-4 2.17 5.76 31.66
5-9 2.92 11.92 31.64
10-14 4.62 14.17 23.54
15-19 6.95 18.44 29.47
20-24 4.72 14.40 22.44
25 or more 7.14 16.27 25.40
Census region of main
office
Northeast 5.77 14.89 28.12
New England 7.86 13.57 31.90
Middle Atlantic 4.98 15.39 26.77
Midwest 4.44 16.42 28.38
East North Central 4.40 17.01 29.80
West North Central 4.51 15.25 25.10
South 3.93 10.38 25.73
South Atlantic 4.87 10.81 28.32
East South Central 3.83(*) 11.23 22.54
West South Central 2.44(*) 9.24 22.12
West 3.73 10.66 31.32
Mountain 1.87(*) 8.99 30.55
Pacific 4.35 11.21 31.67
Urbanization at main office
Urban 4.64 13.49 28.58
Rural 3.12 9.20 25.74
Number of offices
One 3.87 11.62 27.61
Two 7.68 19.17 31.20
Three or more 7.78 21.83 28.28
Sales area
Primarily within U.S. 4.33 12.38 28.39
International or global 4.49 17.95 22.70
Owners' participation
Owner management 4.36 11.72 28.02
Hired management 4.09 23.20 28.74
Race, ethnicity, and sex
of majority owners
Nonwhite or Hispanic 2.54 8.65 27.64
Non-Hispanic white 4.62 13.38 28.24
White 4.49 12.97 28.02
Black 1.92(*) 8.75 28.05
Asian or Pacific Islander 2.83 10.33 34.22
American Indian or Alaska
Native 5.78(*) 15.16(*) 10.84
Hispanic 2.15(*) 6.66 22.80
Non-Hispanic 4.48 13.02 28.46
Female 4.60 9.75 30.39
Male 4.38 13.68 27.41
Ownership equally divided
by sex 1.96(*) 10.97 28.69
MEMO: Other credit
Credit card
Category Trade
credit
Personal Business
All firms, 1998 45.18 33.31 60.33
All firms, 1993 40.72 28.83 63.81
Number of employees(4)
0-1 44.91 19.19 42.69
2-4 46.75 28.46 56.86
5-9 44.00 41.93 71.14
10-19 50.38 51.39 77.90
20-49 39.51 55.61 80.67
50-99 30.29 56.52 80.67
100-499 23.00 59.67 83.37
Fiscal year sales
(thousands of dollars)
Less than 25 41.10 11.14 30.34
25-49 45.71(*) 20.75 46.78
50-99 47.83 27.11 54.30
100-249 51.84 31.90 63.01
250-499 47.59 43.06 75.85
500-999 41.50 44.04 77.27
1,000-2,499 45.37 54.45 80.15
2,500-4,999 33.21 62.68 79.86
5,000-9,999 24.79 67.66 72.10
10,000 or more 22.39 62.09 76.58
End-of-year assets
(thousands of dollars)
Less than 25 45.52 21.35 43.22
25-49 49.80 29.22 59.78
50-99 46.71 33.85 67.46
100-249 48.10 36.54 70.57
250-499 41.78 49.33 73.82
500-999 43.95 42.97 75.30
1,000-2,499 35.25 57.48 78.88
2,500-4,999 25.38 65.31 80.00
5,000 or more 26.53 68.11 80.59
Organizational form
Proprietorship 49.04 21.63 50.85
Partnership 36.92 28.45 57.82
S corporation 43.24 46.55 71.74
C corporation 40.79 48.12 71.08
Standard industrial
classification
Construction and mining 39.97 33.35 77.29
Primary manufacturing
(20-29) 48.91 43.18 73.23
Other manufacturing (30-39) 45.89 36.00 78.19
Transportation (40-49) 44.10 45.39 44.15
Wholesale trade (50-51) 45.14 43.56 68.46
Retail trade (52-59) 40.46 29.15 63.64
Insurance agents and
real estate (60-69) 39.68 32.68 34.62
Business services (70-79) 46.01 28.25 59.14
Professional services
(80-89) 53.39 35.40 49.57
Years under current
ownership
0-4 45.64 28.14 54.11
5-9 47.75 37.79 59.74
10-14 46.30 33.09 62.04
15-19 41.86 36.52 63.94
20-24 45.07 33.65 67.56
25 or more 41.52 31.15 60.91
Census region of main
office
Northeast 48.87 33.51 60.41
New England 50.65 40.82 63.33
Middle Atlantic 48.19 30.73 59.30
Midwest 42.20 30.86 64.27
East North Central 41.04 32.57 65.82
West North Central 44.52 27.43 61.16
South 41.15 34.36 58.77
South Atlantic 42.10 35.89 60.13
East South Central 41.95 34.29 65.81
West South Central 39.18 31.90 52.82
West 49.95 33.87 58.97
Mountain 52.05 34.77 61.68
Pacific 49.26 33.57 58.06
Urbanization at main office
Urban 46.00 34.05 59.81
Rural 41.90 30.35 62.39
Number of offices
One 45.20 31.35 58.60
Two 45.58 45.70 72.60
Three or more 44.71 51.53 73.75
Sales area
Primarily within U.S. 44.82 32.53 60.04
International or global 53.32 49.89 67.33
Owners' participation
Owner management 46.03 32.92 59.45
Hired management 35.05 37.96 71.05
Race, ethnicity, and sex
of majority owners
Nonwhite or Hispanic 45.17 28.20 50.98
Non-Hispanic white 45.16 34.21 62.16
White 44.85 33.97 61.19
Black 44.05 28.78 46.20
Asian or Pacific Islander 52.81 26.94 56.83
American Indian or Alaska
Native 45.19(*) 19.97(*) 75.93(*)
Hispanic 41.75 28.95 46.37
Non-Hispanic 45.39 33.57 61.24
Female 46.71 28.21 51.81
Male 44.77 34.64 63.07
Ownership equally divided
by sex 42.21 41.12 61.97
(1.) Excludes owner loans, credit cards, and trade credit.
(2.) Checking accounts: Accounts with unlimited check-writing
privileges, including share draft accounts used for business
purposes and owners' personal checking accounts if used primarily
for business purposes. Savings accounts: Passbook savings accounts,
credit union share accounts, certificates of deposit, other time
deposits, and money market accounts if they were limited in either
the number or the amount of checks that could be written.
(3.) Includes any loans that could not be classified as credit
lines, capital leases, mortgages used for commercial purposes,
motor vehicle loans, or equipment loans (in general, any unsecured
term loan),
(4.) See table 1, note 1.
(5.) Transaction services: The provision of paper money and coins,
the processing of credit card receipts, the collection of night
deposits, and wire transfers. Cash-management services: The
provision of sweep accounts, zero-balance accounts, lockbox
services, and other services designed to automatically invest
liquid funds in liquid, interest-bearing assets. Credit-related
services: The provision of bankers acceptances, letters of credit,
sales finance, and factoring. Trust and pension services: The
provision of 401 (k) plans, pension funds, business trusts, and
securities safekeeping.
(6.) Percentage of partnerships and corporations using owner
loans (excludes proprietorships).
(*) Fewer than fifteen firms in this category reported using this
service, too small a nunber on which to base a reliable statistic.
Proprietorships and partnerships were less likely than corporations to use a financial service. The difference may be due to the tendency of many proprietorships and some partnerships to commingle commingle to mingle together, e.g. cattle mingling with deer. business and personal finances; for example, the owners may use personal savings and checking accounts for business purposes.(16) Also, young firms (less than five years old), firms with single offices, and black-, Hispanic-, and female-owned firms were less likely than other firms to use a financial service. Checking and Savings Most small businesses (94 percent) had a checking account at the end of 1998, the same percentage as used any liquid asset account (checking or savings).(17) Because a checking account, including a share draft account, is a vehicle for paying suppliers and depositing sales receipts, it is not surprising that the reported use of "any service" (96 percent) nearly matches the reported use of "any liquid asset account." The data on business savings accounts, however, reveal some interesting differences across firms. Having such an account was highly correlated cor·re·late v. cor·re·lat·ed, cor·re·lat·ing, cor·re·lates v.tr. 1. To put or bring into causal, complementary, parallel, or reciprocal relation. 2. with firm size. For example, about one-fifth of firms with fewer than ten employees had a business savings account at the end of 1998, compared with more than one-third of firms with ten or more employees. White-owned firms were the most likely to have a business savings account, followed by Hispanic- and Asian-owned firms; black-owned firms were the least likely to have a business savings account. Female-owned firms were more likely than male-owned firms to have such an account. Having such an account varied little by industry. Credit Lines, Loans, and Capital Leases Overall, the incidence of credit lines, outstanding loans, and outstanding capital leases declined between year-end 1993 and year-end 1998 (from 59 percent of firms to 55 percent). Declines were recorded for vehicle loans (which fell from 25 percent to 21 percent), equipment loans (15 percent to 10 percent), and "other" loans (13 percent to 10 percent).(18) Capital leases were about as common in 1998 as in 1993, and the incidence of credit lines and mortgages increased. The slight increase in the percentage of firms with lines of credit (28 percent in 1998 compared with 26 percent in 1993) may have been the result of an increase in commercial banks' use of credit-scoring models. Alternatively, the increase may have been due to differences in the economic environment; as noted earlier, in 1993 the economy was in the early stages of an expansion following a period during which a drop in commercial real estate values erased e·rase tr.v. e·rased, e·ras·ing, e·ras·es 1. a. To remove (something written, for example) by rubbing, wiping, or scraping. b. equity against which many firms might have borrowed. The greater reliance on mortgages in 1998 (13 percent compared with 8 percent in 1993) may reflect recovery of the commercial real estate market. As with checking and savings accounts, the incidence of credit lines, loans, and capital leases increased with firm size: More than 90 percent of the largest firms (100-499 employees) had one of these types of credit at the end of 1998, compared with fewer than 50 percent of very small firms (fewer than five employees). Corporations were more likely than other types of firms to have credit lines, loans, and capital leases. Firms in the services industries (business and professional) were generally less likely than firms in other industries to have these types of credit, perhaps because they require less inventory and equipment. The incidence of credit also varied somewhat with firm age. The percentage of firms that had credit lines, loans, or leases was smallest for those that were less than five years old (51 percent), followed by those that were more than twenty-five years old (53 percent). The finding for the youngest firms is consistent with the observation that depository institutions Depository institution A financial institution that obtains its funds mainly through deposits from the public. This includes commercial banks, savings and loan associations, savings banks and credit unions. typically require that borrowers have several years of financial history to qualify for credit. The incidence of credit lines, loans, and capital leases also varied somewhat with owner characteristics. At year-end 1998, fewer than 50 percent of female-, black-, and Asian-owned firms had one of these forms of credit, compared with roughly 55 percent of male- and white-owned firms. By specific loan type, white-owned firms were generally more likely than nonwhite-, Hispanic-, or female-owned firms to have lines of credit, mortgages, vehicle loans, and equipment loans. Black-owned firms were the most likely to have capital leases and "other" loans. Some of the differences by owner race, ethnicity, and sex may be attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to differences in firm characteristics, such as size. Attribution at·tri·bu·tion n. 1. The act of attributing, especially the act of establishing a particular person as the creator of a work of art. 2. of these univariate univariate adjective Determined, produced, or caused by only one variable differences to owner race, firm size or age, or other variables is a topic for additional research.(19) Financial Management Services Financial management services include transaction services, cash-management services, credit-related services, trust and pension services, and brokerage services.(20) Fifty percent of small businesses used at least one financial management service in 1998, compared with 37 percent in 1993. They were more likely to use transaction and trust services in 1998, compared with 1993, and equally likely to use cash-management and brokerage services. The incidence of credit-related services fell from about 5 percent of firms in 1993 to only 3 percent in 1998, a decline consistent with the overall decline in the incidence of credit lines, loans, and capital leases described earlier. The most widely used financial management service in 1998, reported by about two-fifths of all firms, was transaction services. Trust and pension services were used by only about one in eight firms, and cash-management services by only one in twenty. As was the case for other financial services, the use of financial management services increased with firm size. For the smallest firms (as measured by number of employees), only 34 percent used at least one financial management service, and only a very small percentage used any financial management service other than transaction services. In contrast, about 85 percent of the largest firms used at least one financial management service; the most commonly used was transaction services, followed by cash-management services and trust and pension services. Brokerage services were used mainly by the larger firms, but by only about one in twelve. A smaller proportion of proprietorships used financial management services relative to firms with other organizational forms; they may have less need for these services because they tend to be small and more likely than other types of firms to commingle personal and business accounts. Firms differed in their use of financial management services by the minority status of and, to a somewhat lesser extent, by the sex of the majority owners. Black-, Hispanic-, and female-owned firms were less likely than white- White- (бело-), a prefix used by Bolsheviks to designate their real and alleged enemies of all sorts, by analogy with the White Army.
Loans from Owners, Credit Cards, and Trade Credit In addition to using credit lines, loans, and leases, many small businesses obtain financing by borrowing from the firm's owners (owner loans), borrowing via credit cards, or borrowing from suppliers of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. (trade credit). These alternative forms of credit are different from credit lines, loans, and leases in a number of ways. For example, owner loans are not arm' s-length transactions, as are institutional loans, because the lender LENDER, contracts. He from whom a thing is borrowed. 2. The contract of loan confers rights, and imposes duties on the lender. 1. The lender has the right to revoke the loan at his mere pleasure; 9 Cowen, R. 687; 8 Johns. Rep. 432; 1 T. R. 480; 2 Campb. Rep. owns some portion of the borrowing firm. The interest rates charged for credit card credit often exceed the interest rates for other types of loans; moreover, credit cards, unlike typical loans, provide a convenient means of paying bills and tracking expenses. Trade credit is generally used in connection with the purchase of goods and services from a specific supplier, whereas funds from credit lines, loans, and leases are often available for general purposes and are not restricted to purchases from a single supplier. Also, when outstanding trade credit balances are not repaid in a relatively short period, the finance charges generally exceed those on other loans. Loans from Owners Of the small businesses that could have received loans from owners (that is, those that were organized as corporations or partnerships), 28 percent had such loans in 1998, a slightly smaller percentage than in 1993. Because they generally have fewer credit options, smaller firms might seem more likely than larger firms to borrow Borrow To obtain or receive money on loan with the promise or understanding that it will be repaid. from their owners. This was not the case in 1998. The incidence of owner loans did not generally vary with firm size. For every size group except firms with fewer than two employees, sales of less than $50,000, or assets of less than $25,000, more than 25 percent of firms had owner loans at year-end 1998. For the smallest firms (by number of employees), fewer than 18 percent had owner loans. The information gathered by the survey regarding size, capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , equity injections, and owner loans will enable researchers to examine why the smallest firms had the lowest incidence of this type of loan. Credit Cards Small businesses were somewhat more likely to use credit cards in 1998 compared with 1993. The percentage using personal credit cards for business purposes increased from 41 percent to 45 percent, and the percentage using business credit cards increased from 29 percent to 33 percent. Credit cards are a convenient means of making payments and tracking expenses. Anecdotal evidence anecdotal evidence, n information obtained from personal accounts, examples, and observations. Usually not considered scientifically valid but may indicate areas for further investigation and research. suggests that many smaller and newer businesses also use credit cards as a source of credit, even though it is likely to be more costly than other forms of credit. Lenders sometimes ration ration a fixed allowance of total feed for an animal for one day. Usually specifies the individual ingredients and their amounts and the amounts of the specific nutriments such as carbohydrate, fiber, individual minerals and vitamins. credit to high-risk high-risk adjective Referring to an ↑ risk of suffering from a particular condition Infectious disease Referring to an ↑ risk for exposure to blood-borne pathogens, which occurs with blood bank technicians, dental professionals, dialysis unit firms. Thus, firms just starting out and those having little credit history may be perceived per·ceive tr.v. per·ceived, per·ceiv·ing, per·ceives 1. To become aware of directly through any of the senses, especially sight or hearing. 2. To achieve understanding of; apprehend. as high risk and may therefore rely on credit cards as a substitute for other types of loans. The descriptive results are not entirely consistent with these a priori a priori In epistemology, knowledge that is independent of all particular experiences, as opposed to a posteriori (or empirical) knowledge, which derives from experience. expectations. The use of business credit cards in 1998 did increase with finn (jargon, chat) finn - To pull rank on somebody based on the amount of time one has spent on IRC. The term derives from the fact that IRC was originally written in Finland in 1987. size, but the use of personal credit cards varied little with size, except that the largest firms (those with more than fifty employees or with sales or assets greater than $2.5 million) were less likely than others to use personal credit cards.21 Likewise, credit card use did not vary systematically with finn age. Further research is needed to determine the extent to which, and the types of firms for which, credit card balances may be a substitute for other types of credit. Proprietorships were the most likely to use personal credit cards and the least likely to use business credit cards. Insurance and real estate firms were the least likely to use personal credit cards and, along with firms in business services and retail trade, the least likely to use business credit cards. Trade Credit Trade credit is extended when a supplier provides goods and services at one point in time and collects the charges at a later point. If the bills are not paid promptly prompt adj. prompt·er, prompt·est 1. Being on time; punctual. 2. Carried out or performed without delay: a prompt reply. tr.v. , trade credit becomes a form of financing. Businesses use trade credit for both transaction and financing purposes. Trade credit reduces the transactions costs Transactions costs The time, effort, and money necessary, including such things as commission fees and the cost of physically moving the asset from seller to buyer. Transcations costs should also include the bid/ask spread as well as price impact costs (for example a large sell that businesses would incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. if they had to make payment at the time of delivery, for example, by making funds available for other uses. However, most trade credit is extended for a very short period (thirty or sixty days) and is always granted in connection with specific purchases. The interest rates charged on overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. balances generally are quite high; 2 percent a month is not uncommon. Thus, it is reasonable to expect that the firms using trade credit for longer-term financing purposes are firms that would have difficulty obtaining credit from other sources. Trade credit was used by 60 percent of small businesses in 1998, an incidence of use that exceeds that for all other financial services except checking. In 1993, 64 percent of small businesses used the service. Use generally increased with firm size; except for the smallest firms, more than half the firms in each size category used trade credit in 1998. Black-, Hispanic-, and female-owned firms were less likely than others to use the service; the differences in use between these groups of firms and others were similar to the differences in use between smaller and larger firms. The use of trade credit was most common among firms in manufacturing, construction, and wholesale and retail trade--industries for which nonlabor costs, such as the costs of equipment and inventory, are large relative to labor costs. Among industries for which labor's share of costs is high, such as business and professional services, trade credit use was somewhat less common, but it was still used by at least half the firms. The firms least likely to use trade credit were those whose principal activity involved insurance and real estate or transportation. The survey findings seem to suggest that trade credit was used mainly for transactions purposes. However, some firms undoubtedly used it for financing purposes; further research may help to determine the characteristics of these firms. SUPPLIERS OF FINANCIAL SERVICES USED BY SMALL BUSINESSES The suppliers of financial services to small businesses include financial institutions--depository institutions (commercial banks and thrift institutions, including savings associations, savings banks savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. , and credit unions) as well as nondepository institutions (finance, leasing, mortgage, brokerage, and insurance companies)--and nonfinancial Adj. 1. nonfinancial - not involving financial matters financial, fiscal - involving financial matters; "fiscal responsibility" sources (such as individuals, family members, other businesses, and government entities). The survey collected information on the sources of checking and saving services; credit lines, loans, and capital leases; and financial management services.(22) In 1998, depository institutions and nonfinancial sources were used by a slightly smaller share of the small business population, and nondepository financial institutions Noun 1. nondepository financial institution - a financial institution that funds their investment activities from the sale of securities or insurance financial institution, financial organisation, financial organization - an institution (public or private) that by a slightly larger share, than in 1993 (table 5). Among depository institutions, commercial bank use was about the same, but thrift thrift: see leadwort. use--despite the deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. of thrift lending to businesses--was somewhat lower, possibly reflecting the decline in the number of thrift institutions nationwide. The decline in the use of thrifts was due to a decline in the use of savings institutions; the use of credit unions increased over the period, from 4 percent to 6 percent of firms.
5. Percentage of small businesses using selected suppliers
of financial services, by selected category of firm, 1998
A. Any supplier, any financial institution,
and depository institutions
Financial institution
Category Any
supplier
Any Depository
Any Commercial
bank
All firms, 1998 96.18 95.74 94.98 88.86
All firms, 1993 97.03 96.84 96.48 89.72
Number of employees(1)
0-1 91.02 89.85 88.67 79.40
2-4 95.86 95.50 94.77 88.09
5-9 99.37 99.37 98.50 93.90
10-19 100.00 100.00 99.79 97.33
20-49 100.00 100.00 100.00 98.06
50-99 100.00 97.94 97.42 93.23
100-499 100.00 100.00 100.00 98.20
Fiscal year sales (thousands
of dollars)
Less than 25 82.99 81.52 80.64 68.32
25-49 94.77 94.77 93.67 85.80
50-99 97.97 97.58 96.85 88.47
100-249 99.34 98.83 97.59 92.58
250-499 99.82 99.82 99.47 96.40
500-999 99.57 99.57 99.44 96.16
1,000-2,499 100.00 100.00 99.09 96.89
2,500-4,999 100.00 99.03 98.89 97.43
5,000-9,999 100.00 100.00 100.00 100.00
10,000 or more 100.00 100.00 99.80 97.23
End-of-year assets (thousands
of dollars)
Less than 25 89.87 89.12 88.35 78.96
25-49 98.65 98.65 97.00 91.48
50-99 99.68 98.93 98.29 92.67
100-249 99.46 99.20 98.80 94.71
250-499 100.00 100.00 99.34 96.29
500-999 100.00 100.00 100.00 95.38
1,000-2,499 100.00 99.24 98.48 96.18
2,500-4,999 100.00 100.00 99.93 99.93
5,000 or more 100.00 100.00 99.84 99.84
Organizational form
Proprietorship 93.16 92.33 91.41 82.24
Partnership 95.37 95.37 95.14 89.50
S corporation 99.85 99.72 98.88 96.06
C corporation 99.58 99.58 99.13 96.42
Standard industrial
classification
Construction and mining
(10-19) 97.11 96.41 96.51 88.07
Primary manufacturing (20-29) 95.49 94.14 94.11 89.50
Other manufacturing (30-39) 94.15 94.15 93.47 89.90
Transportation (40-49) 98.60 98.60 98.60 93.85
Wholesale trade (50-51) 99.12 98.88 98.51 95.72
Retail trade (52-59) 96.84 96.34 95.92 92.64
Insurance agents and real
estate (60-69) 96.61 96.02 96.02 93.79
Business services (70-79) 94.48 94.13 92.44 83.16
Professional services (80-89) 96.04 95.33 94.51 87.24
Years under current ownership
0-4 94.50 93.73 93.22 85.83
5-9 96.05 95.97 94.94 89.50
10-14 96.59 96.19 95.22 88.48
15-19 98.45 98.45 97.87 93.01
20-24 98.03 97.52 96.35 89.00
25 or more 95.19 94.27 93.92 89.06
Census region of main office
Northeast 95.81 95.40 93.75 86.04
New England 94.67 94.67 93.18 78.74
Middle Atlantic 96.24 95.68 93.97 88.83
Midwest 96.48 96.23 95.71 88.01
East North Central 96.54 96.54 95.76 86.18
West North Central 96.36 95.62 95.62 91.67
South 96.05 95.43 94.93 90.62
South Atlantic 96.43 95.80 95.10 90.93
East South Central 96.51 95.49 95.49 91.69
West South Central 95.18 94.80 94.36 89.55
West 96.37 95.97 95.33 89.38
Mountain 97.25 97.25 97.21 91.53
Pacific 96.08 95.54 94.71 88.66
Urbanization at main office
Urban 96.45 96.09 95.29 89.35
Rural 95.12 94.37 93.77 86.91
Number of offices
One 95.68 95.22 94.42 87.91
Two 100.00 99.63 99.37 94.53
Three or more 99.13 99.13 98.14 98.14
Sales area
Primarily within U.S. 96.10 95.70 94.97 88.98
International or global 97.81 96.54 95.13 86.08
Owners' participation
Owner management 95.93 95.46 94.66 88.11
Hired management 99.16 99.16 98.85 97.80
Race, ethnicity, and sex of
majority owners
Nonwhite or Hispanic 93.86 93.45 92.96 87.61
Non-Hispanic white 96.56 96.11 95.35 89.05
White 96.37 95.88 95.14 88.85
Black 91.33 91.33 90.74 85.41
Asian or Pacific Islander 97.50 97.50 96.93 94.36
American Indian or Alaska
Native 92.67 92.67 92.67 77.48
Hispanic 92.95 91.88 91.05 85.23
Non-Hispanic 96.36 95.96 95.25 89.08
Female 91.85 91.34 90.72 82.00
Male 97.53 97.09 96.31 90.99
Ownership equally divided by
sex 98.34 98.34 97.00 92.11
Financial institution
Depository
Category
Thrift
Savings Credit
Any institution union
All firms, 1998 12.06 6.29 5.90
All firms, 1993 15.37 11.80 4.04
Number of employees(1)
0-1 13.46 5.07 8.40
2-4 11.93 6.20 5.96
5-9 13.29 8.57 4.89
10-19 10.57 4.60(*) 5.98
20-49 7.33 5.65 1.68(*)
50-99 9.38 8.79 .90(*)
100-499 6.39 6.14(*) .38(*)
Fiscal year sales (thousands
of dollars)
Less than 25 14.75 4.33 10.43
25-49 13.08 5.80 7.27
50-99 11.81 6.34 5.47
100-249 12.60 7.64 5.16
250-499 9.72 4.62 5.11
500-999 12.47 8.70 4.39
1,000-2,499 11.00 6.99 4.26(*)
2,500-4,999 9.30 8.43(*) 1.06(*)
5,000-9,999 5.78(*) 3.29(*) 2.48(*)
10,000 or more 5.16(*) 5.16(*) .00(*)
End-of-year assets (thousands
of dollars)
Less than 25 13.33 5.55 8.01
25-49 11.75 5.87 5.88
50-99 11.94 5.84 6.09
100-249 11.74 7.84 3.91
250-499 10.56 5.41 5.38
500-999 13.47 10.29 3.77(*)
1,000-2,499 10.11 7.39 2.72(*)
2,500-4,999 7.26(*) 7.06(*) .20(*)
5,000 or more 3.58(*) 3.58(*) .00(*)
Organizational form
Proprietorship 15.42 7.12 8.53
Partnership 12.24 6.67(*) 5.58(*)
S corporation 9.70 6.05 3.71
C corporation 6.49 4.39 2.14
Standard industrial
classification
Construction and mining
(10-19) 15.26 8.56 6.70
Primary manufacturing (20-29) 12.27 7.74(*) 4.54(*)
Other manufacturing (30-39) 4.11(*) 2.72(*) 1.39(*)
Transportation (40-49) 10.41 5.10(*) 5.31(*)
Wholesale trade (50-51) 9.92 5.98(*) 3.94(*)
Retail trade (52-59) 8.61 5.38 3.63
Insurance agents and real
estate (60-69) 11.49 7.06 4.67(*)
Business services (70-79) 13.83 5.94 7.90
Professional services (80-89) 14.64 7.01 7.82
Years under current ownership
0-4 12.14 4.27 8.15
5-9 11.18 5.47 5.88
10-14 12.58 7.85 4.72
15-19 11.96 6.63 5.44
20-24 11.60 5.17 6.43
25 or more 13.23 9.25 4.13
Census region of main office
Northeast 14.40 11.38 3.10
New England 24.42 17.77 6.68(*)
Middle Atlantic 10.58 8.94 1.74(*)
Midwest 13.62 7.41 6.20
East North Central 15.96 9.72 6.24
West North Central 8.91 2.78(*) 6.13
South 7.77 3.17 4.65
South Atlantic 7.29 3.67 3.72
East South Central 6.44(*) 4.83(*) 1.61(*)
West South Central 9.26 1.49(*) 7.77
West 14.41 5.60 9.20
Mountain 15.39 2.59(*) 12.80
Pacific 14.09 6.60 8.00
Urbanization at main office
Urban 11.74 5.95 5.93
Rural 13.34 7.67 5.82
Number of offices
One 12.01 6.00 6.13
Two 14.17 9.33 5.08
Three or more 8.61 6.43 2.61(*)
Sales area
Primarily within U.S. 12.08 6.26 5.97
International or global 11.80 7.14(*) 4.66(*)
Owners' participation
Owner management 12.34 6.23 6.24
Hired management 8.87 7.13 1.93(*)
Race, ethnicity, and sex of
majority owners
Nonwhite or Hispanic 11.13 4.84 6.54
Non-Hispanic white 12.28 6.57 5.83
White 12.24 6.40 5.94
Black 13.99 7.03 7.83
Asian or Pacific Islander 7.30 4.35(*) 2.95(*)
American Indian or Alaska
Native 15.19(*) 3.98(*) 11.21(*)
Hispanic 11.25 3.47(*) 7.77
Non-Hispanic 12.14 6.47 5.81
Female 13.67 5.78 8.15
Male 11.44 6.34 5.20
Ownership equally divided by
sex 13.91 8.82(*) 5.10(*)
B. Nondepository financial institutions and nonfinancial suppliers
Nondepository financial
institution
Category
Any Finance Brokerage
company
All firms, 1998 32.65 14.47 10.88
All firms, 1993 30.80 13.82 10.20
Number of employees(1)
0-1 17.28 6.78 5.84
2-4 28.37 13.54 8.75
5-9 38.53 17.02 12.44
10-19 53.46 21.41 17.43
20-49 57.69 25.59 23.94
50-99 60.01 27.29 21.45
100-499 71.66 30.38 32.58
Fiscal year sales (thousands
of dollars)
Less than 25 11.65 4.90 2.27(*)
25-49 20.55 8.41 6.23(*)
50-99 22.73 10.08 4.76
100-249 32.48 15.81 11.33
250-499 39.53 14.93 14.49
500-999 42.86 19.99 11.26
1,000-2,499 57.28 25.47 23.14
2,500-4,999 60.07 30.76 20.85
5,000-9,999 70.25 25.66 28.05
10,000 or more 70.95 30.84 41.20
End-of-year assets (thousands
of dollars)
Less than 25 17.02 7.90 4.45
25-49 25.51 12.29 9.69
50-99 36.14 16.23 11.23
100-249 41.55 18.09 12.11
250-499 43.99 18.16 15.22
500-999 54.74 23.15 21.25
1,000-2,499 57.01 23.82 22.76
2,500-4,999 64.62 25.90 36.86
5,000 or more 68.01 30.11 29.87
Organizational form
Proprietorship 23.90 10.75 7.61
Partnership 29.60 15.53 6.55
S corporation 39.70 16.84 13.79
C corporation 47.03 20.54 17.02
Standard industrial
classification
Construction and mining
(10-19) 31.12 18.06 10.87
Primary manufacturing (20-29) 31.79 12.04 6.93
Other manufacturing (30-39) 37.88 11.46 15.79
Transportation (40-49) 34.83 19.38 6.90
Wholesale trade (50-51) 42.10 19.18 13.24
Retail trade (52-59) 28.71 13.15 5.50
Insurance agents and real
estate (60-69) 29.88 13.90 10.79
Business services (70-79) 29.31 13.38 8.33
Professional services (80-89) 38.24 13.77 19.38
Years under current ownership
0-4 28.33 13.72 5.78
5-9 33.84 14.55 9.00
10-14 37.13 16.37 12.97
15-19 34.33 13.50 13.65
20-24 30.81 14.02 12.57
25 or more 30.81 13.67 15.81
Census region of main office
Northeast 36.04 16.46 14.89
New England 35.00 16.91 15.31
Middle Atlantic 36.44 16.29 14.74
Midwest 30.15 11.73 11.01
East North Central 31.51 12.21 11.31
West North Central 27.41 10.76 10.41
South 31.16 14.59 8.27
South Atlantic 34.37 16.37 8.88
East South Central 29.49 13.80 7.91
West South Central 26.82 12.11 7.45
West 34.13 15.17 11.12
Mountain 29.71 13.17 8.11
Pacific 35.60 15.83 12.12
Urbanization at main office
Urban 34.32 15.16 11.98
Rural 26.01 11.75 6.49
Number of offices
One 30.61 13.43 10.23
Two 45.87 21.88 14.95
Three or more 50.30 21.26 17.09
Sales area
Primarily within U.S. 32.19 14.21 10.82
International or global 41.47 18.94 12.31
Owners' participation
Owner management 31.69 14.10 10.57
Hired management 43.23 18.19 14.44
Race, ethnicity, and sex of
majority owners
Nonwhite or Hispanic 30.91 14.17 7.09
Non-Hispanic white 32.88 14.54 11.55
White 32.69 14.49 11.17
Black 28.74 15.03 6.02
Asian or Pacific Islander 32.73 12.58 9.27
American Indian or Alaska
Native 40.50(*) 22.55(*) 14.26(*)
Hispanic 30.40 13.70 5.63
Non-Hispanic 32.74 14.51 11.23
Female 29.18 12.05 9.71
Male 33.55 15.06 11.43
Ownership equally divided by
sex 36.48 18.08 8.06
Nondepository
financial Nonfinancial
institution supplier
Category
Leasing Other Any(2)
company
All firms, 1998 7.48 7.17 12.46
All firms, 1993 8.56 3.59 15.61
Number of employees(1)
0-1 3.37 3.95 9.04
2-4 4.64 5.81 10.02
5-9 10.22 8.91 13.59
10-19 17.80 11.02 20.40
20-49 12.12 13.28 25.45
50-99 23.02 17.00 18.85
100-499 23.42 17.32 18.50
Fiscal year sales (thousands
of dollars)
Less than 25 1.44(*) 3.26 9.46
25-49 1.93(*) 5.40 6.21
50-99 5.29 4.33 9.36
100-249 7.41 6.13 13.36
250-499 7.93 8.97 12.52
500-999 14.84 11.33 16.84
1,000-2,499 12.77 9.82 19.68
2,500-4,999 18.26 11.96 17.17
5,000-9,999 13.49 18.63 20.13
10,000 or more 17.49 19.34 15.94
End-of-year assets (thousands
of dollars)
Less than 25 3.61 4.07 7.93
25-49 4.25 4.01 7.40
50-99 7.98 7.27 12.68
100-249 9.45 10.46 17.06
250-499 10.89 8.97 14.39
500-999 16.26 10.43 19.11
1,000-2,499 10.48 16.00 25.80
2,500-4,999 26.98 10.44 14.03
5,000 or more 16.14 17.28 27.33
Organizational form
Proprietorship 3.58 5.06 10.86
Partnership 9.42 5.16(*) 9.00
S corporation 11.73 7.65 13.98
C corporation 11.39 12.56 15.85
Standard industrial
classification
Construction and mining
(10-19) 3.52 4.50 7.74
Primary manufacturing (20-29) 13.00 6.54 18.87
Other manufacturing (30-39) 9.59 8.97 16.99
Transportation (40-49) 7.55 8.65 13.77
Wholesale trade (50-51) 9.66 10.87 13.09
Retail trade (52-59) 4.21 11.44 14.82
Insurance agents and real
estate (60-69) 7.43 4.68 12.63
Business services (70-79) 9.06 5.59 12.33
Professional services (80-89) 8.87 5.50 10.41
Years under current ownership
0-4 6.64 7.70 13.55
5-9 10.44 6.34 10.63
10-14 8.43 8.56 11.53
15-19 7.29 7.65 13.67
20-24 5.80 6.76 15.43
25 or more 3.61 5.65 11.51
Census region of main office
Northeast 7.14 6.73 12.75
New England 6.60 6.31 13.94
Middle Atlantic 7.34 6.89 12.29
Midwest 6.69 7.08 12.69
East North Central 6.82 7.63 14.21
West North Central 6.44 5.97 9.65
South 7.95 6.85 11.70
South Atlantic 9.56 6.67 14.03
East South Central 7.71 6.31 7.29
West South Central 5.46 7.43 10.22
West 7.79 7.96 13.02
Mountain 6.55 6.82 17.54
Pacific 8.20 8.33 11.51
Urbanization at main office
Urban 8.16 7.48 12.00
Rural 4.77 5.93 14.33
Number of offices
One 6.79 6.64 11.71
Two 10.29 10.21 16.52
Three or more 16.40 13.03 20.05
Sales area
Primarily within U.S. 7.31 6.76 12.35
International or global 10.13 16.04 13.56
Owners' participation
Owner management 7.09 6.98 12.31
Hired management 11.47 9.26 13.40
Race, ethnicity, and sex of
majority owners
Nonwhite or Hispanic 7.56 9.00 13.47
Non-Hispanic white 7.41 6.85 12.31
White 7.45 6.84 12.37
Black 7.89 8.18 16.57
Asian or Pacific Islander 6.13 13.23 12.59
American Indian or Alaska
Native 8.67(*) 6.37(*) 4.31(*)
Hispanic 7.87 7.15 13.57
Non-Hispanic 7.39 7.20 12.39
Female 6.43 7.37 12.29
Male 7.54 7.07 12.56
Ownership equally divided by
sex 12.47 7.77(*) 9.81
Nonfinancial supplier
Category
Family Other Government
and businesses
individuals
All firms, 1998 6.14 5.95 1.04
All firms, 1993 8.90 7.43 .64
Number of employees(1)
0-1 3.95 4.82 .45(*)
2-4 5.90 4.12 .62(*)
5-9 6.15 6.88 1.29(*)
10-19 8.66 10.46 2.05(*)
20-49 12.93 11.82 3.20(*)
50-99 6.88 9.28 3.29(*)
100-499 4.63 12.87 2.75(*)
Fiscal year sales (thousands
of dollars)
Less than 25 5.19 3.87 .54(*)
25-49 2.92(*) 3.03(*) .26(*)
50-99 4.78 4.84 .51(*)
100-249 7.52 5.57 .91(*)
250-499 7.32 4.70 1.32(*)
500-999 6.29 10.56 .82(*)
1,000-2,499 8.35 9.86 3.34(*)
2,500-4,999 7.41 8.81 1.55(*)
5,000-9,999 6.20(*) 11.17 3.72(*)
10,000 or more 4.82 10.73 1.69(*)
End-of-year assets (thousands
of dollars)
Less than 25 4.06 3.57 .37(*)
25-49 3.71 3.57(*) .10(*)
50-99 6.29 6.51 .21(*)
100-249 8.85 8.18 1.42(*)
250-499 7.71 6.48 1.89(*)
500-999 9.85 7.74 2.47(*)
1,000-2,499 9.87 13.90 3.47(*)
2,500-4,999 4.00(*) 6.88 3.47(*)
5,000 or more 5.80 20.93 2.46(*)
Organizational form
Proprietorship 5.68 5.13 .57(*)
Partnership 2.74(*) 4.27(*) 1.98(*)
S corporation 6.37 7.43 .93
C corporation 8.18 6.82 2.03
Standard industrial
classification
Construction and mining
(10-19) 3.44 4.35 .92(*)
Primary manufacturing (20-29) 7.81 12.14 1.30(*)
Other manufacturing (30-39) 10.34 5.13 1.76(*)
Transportation (40-49) 6.17(*) 7.61(*) .02(*)
Wholesale trade (50-51) 7.19 4.43 1.77(*)
Retail trade (52-59) 5.53 8.18 1.93
Insurance agents and real
estate (60-69) 8.33 4.98(*) .00
Business services (70-79) 6.90 5.24 .74(*)
Professional services (80-89) 4.94 5.31 .68(*)
Years under current ownership
0-4 7.84 5.33 .92(*)
5-9 6.44 3.74 .54(*)
10-14 4.95 6.51 .96(*)
15-19 7.19 6.83 1.38(*)
20-24 5.93 7.17 2.77(*)
25 or more 3.42 7.99 .80(*)
Census region of main office
Northeast 5.92 6.41 .68(*)
New England 7.03(*) 6.71 .93(*)
Middle Atlantic 5.50 6.29 .59(*)
Midwest 6.10 6.16 1.20(*)
East North Central 7.61 6.59 .79(*)
West North Central 3.08(*) 5.30 2.02(*)
South 5.18 5.90 .96
South Atlantic 6.95 6.58 .63(*)
East South Central 3.97(*) 2.49(*) 1.66(*)
West South Central 2.94 6.59 1.15(*)
West 7.50 5.54 1.26
Mountain 8.89 7.38 3.60(*)
Pacific 7.04 4.93 .49(*)
Urbanization at main office
Urban 5.84 6.08 .79
Rural 7.34 5.46 2.05
Number of offices
One 5.89 5.46 1.08
Two 6.51 9.67 .47(*)
Three or more 11.35 7.88 1.51(*)
Sales area
Primarily within U.S. 6.16 5.81 1.05
International or global 5.29 8.10 .87(*)
Owners' participation
Owner management 6.17 5.72 1.07
Hired management 5.31 8.36 .71(*)
Race, ethnicity, and sex of
majority owners
Nonwhite or Hispanic 8.05 5.01 1.08(*)
Non-Hispanic white 5.85 6.15 .99
White 5.95 6.06 1.03
Black 10.32 5.81 1.29(*)
Asian or Pacific Islander 7.21(*) 5.81(*) .22(*)
American Indian or Alaska
Native 3.98(*) .32(*) .32(*)
Hispanic 8.29 4.73(*) 1.64(*)
Non-Hispanic 6.03 6.05 .96
Female 6.07 5.36 1.22(*)
Male 6.06 6.26 1.01
Ownership equally divided by
sex 6.12(*) 4.07(*) .56(*)
(1.) See table 1, note 1.
(2.) Includes a few sources for which the type could not be determined
(fewer than 1 percent of the sources identified by respondents).
(*) Fewer than fifteen firms in this category reported using this
supplier, too small a number on which to base a reliable statistic.
Among nondepository financial institutions, the use of leasing companies was somewhat less common and the use of finance companies and "other" nondepository financial institutions (including mortgage banking and insurance companies) was somewhat more common relative to 1993. These changes are consistent with the finding that the percentage of small businesses that had outstanding mortgages increased over the period between surveys. Depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. Financial Institutions Depository institutions provided at least one financial service to about 95 percent of small businesses in 1998 (roughly the same percentage of small businesses that had a business checking or savings account in 1998). Commercial banks were used by a far larger percentage of firms (89 percent) than were thrift institutions (savings institutions and credit unions) (12 percent).(23) In general, the percentage of firms using commercial banks increased with firm size; in contrast, the percentage using thrifts generally declined with firm size. Proprietorships, which are generally the smallest firms, were less likely than firms with other organizational forms to use commercial banks but were about twice as likely as corporations to use thrifts. The use of thrift institutions declined between 1993 and 1998, from 15 percent to 12 percent of firms. As in 1993, small businesses in New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. were more likely to use thrifts than were those in other parts of the country, probably because of the relatively large number of savings banks in New England. Black-, Hispanic-, and female-owned firms were less likely than non-Hispanic- and white-owned firms to use commercial banks. Black- and female-owned firms were more likely to use thrifts than were white-and male-owned businesses. Asian-owned firms were the most likely to use commercial banks and the least likely to use thrifts compared with other ownership groups. Nondepository Financial Institutions Nondepository financial institutions were a source of financial services for about one-third of small businesses in 1998, somewhat more than the fraction in 1993. The most commonly used source was finance companies, followed by brokerage companies. The use of each type of nondepository financial supplier increased with firm size. About 72 percent of small businesses with more than 100 employees used at least one of these sources; about 30 percent used finance companies and brokerage companies. Use of nondepository financial institutions also differed by organizational form and ranged from 24 percent of proprietorships to 47 percent of C corporations. Proprietorships and partnerships were half as likely as corporations to use brokerage companies. The use of nondepository financial institutions varied with the race, ethnicity, and sex of a firm's owners. Female- and black-owned firms were the least likely to use these sources. The differences among groups were greatest in the use of brokerage companies; for example, 11 percent of white-owned businesses used brokerages, compared with 6 percent of black-owned and Hispanic-owned firms. Female-owned firms were less likely than male-owned firms to use finance companies, brokerages, and leasing companies. Nonfinancial Suppliers About 12 percent of the small businesses used nonfinancial sources for financial services in 1998. About 6 percent used family and individuals and other businesses, and 1 percent used government sources.(24) The use of nonfinancial sources did not consistently increase with firm size. For example, the percentage of firms using such sources increased with employment for groups of firms with up to forty-nine employees and with 1998 sales of up to $2,500,000. For larger firms, the percentage using such sources generally remained at the higher levels. Individuals and family were used almost exclusively for credit lines, loans, and leases (table 6). It was expected that the use of individuals or family members as a source of financial services would be most important for younger firms. These firms sometimes have difficulty borrowing from financial institutions, in part because financial institutions often require that prospective borrowers provide several years of financial statements with their loan applications. Nonfinancial sources, especially family members or other individuals familiar with prospective borrowers, may be better positioned to evaluate credit-worthiness and to monitor the financial condition of younger firms. Alternatively, nonfinancial sources may have lower credit standards Credit Standards The guidelines a company follows to determine whether a credit applicant is creditworthy. than financial institutions. The survey results show that in 1998 the use of family or individuals was most common among firms younger than five years and among those that had been operating for fifteen to nineteen years; it was least common among firms that had been operating for more than twenty-five years. Thus, the expectation regarding firm age and the use of nonfinancial sources is not entirely consistent with the descriptive data from the survey. However, further analysis that statistically controls for factors besides age could lead to a different conclusion.
6. Percentage of small businesses using selected of
financial services, by selected service, 1998
Financial institution
Service Any
supplier
Any Depository
Any Commercial
bank
Any 96.18 95.74 94.98 88.86
Liquid asset account(1) 94.43 94.12 93.58 86.67
Checking 94.04 93.73 93.19 86.30
Savings 22.20 21.91 20.56 17.84
Credit lines, loans,
and capital leases 55.09 51.36 41.96 38.88
Line of credit 27.71 27.04 25.61 24.70
Mortgage 13.29 11.68 10.16 8.82
Vehicle 20.55 20.11 13.16 11.30
Equipment 10.18 8.89 5.91 5.36
Capital lease 10.59 9.58 2.65 2.40
Other(2) 9.92 5.02 4.45 4.22
Financial management(3) 49.81 48.10 40.25 38.15
Transaction 41.07 39.75 37.24 35.27
Cash-management 5.21 5.09 4.73 4.54
Credit-related 3.09 3.02 2.47 2.39
Brokerage 4.34 4.18 .26 .25
Trust and pension 12.62 11.65 2.76 2.71
Financial institution
Depository Non-
deposi-
tory
Service
Thrift
Any Savings Credit Any
institution union
Any 12.06 6.29 5.90 32.65
Liquid asset account(1) 8.89 4.66 4.26 3.18
Checking 8.06 4.28 3.80 1.31
Savings 3.08 1.08 1.99 2.10
Credit lines, loans,
and capital leases 4.87 2.45 2.45 20.11
Line of credit 1.15 .74 .41 2.21
Mortgage 1.42 1.18 .24(*) 1.85
Vehicle 2.07 .48 1.59 8.59
Equipment .55 .28(*) .27(*) 3.37
Capital lease .25(*) .16(*) .10(*) 7.63
Other(2) .24(*) .10(*) .13(*) .69
Financial management(3) 3.00 1.51 1.52 17.29
Transaction 2.78 1.41 1.39 5.60
Cash-management .31(*) .22(*) .09(*) .46
Credit-related .12(*) .00(*) .11(*) .67
Brokerage .01(*) .00(*) .01(*) 4.05
Trust and pension .06(*) .01(*) .04(*) 9.27
Financial institution
Nondepository
Service
Finance Brokerage Leasing Other
company company
Any 14.47 10.88 7.48 7.17
Liquid asset account(1) .49 2.58 .00(*) .16(*)
Checking .26(*) .98 .00(*) .07(*)
Savings .28 1.73 .00(*) .10(*)
Credit lines, loans,
and capital leases 12.62 .31 7.37 1.67
Line of credit 1.64 .23(*) .34(*) .14(*)
Mortgage .58 .00(*) .07(*) 1.23
Vehicle 7.91 .04(*) .61 .07(*)
Equipment 2.14 .00(*) 1.31 .00(*)
Capital lease 2.30 .05(*) 5.59 .02(*)
Other(2) .37 .04(*) .05(*) .24(*)
Financial management(3) 2.90 9.74 .42 5.68
Transaction 1.64 .49 .20(*) 3.62
Cash-management .06(*) .40 .00(*) .00(*)
Credit-related .51 .00(*) .14(*) .02(*)
Brokerage .11(*) 3.84 .05(*) .07(*)
Trust and pension .76 6.56 .04(*) 2.14
Nonfinancial supplier
Service
Family Other Govern-
Any and businesses ment
individuals
Any 12.46 6.14 5.95 1.04
Liquid asset account(1) .34(*) .04(*) .30(*) .00(*)
Checking .14(*) .04(*) .10(*) .00(*)
Savings .26(*) .03(*) .23(*) .00(*)
Credit lines, loans,
and capital leases 9.82 6.11 3.13 1.04
Line of credit .80 .02(*) .77 .01(*)
Mortgage 1.82 1.29 .25(*) .33
Vehicle .45 .28(*) .14(*) .00(*)
Equipment 1.42 .43(*) .88 .11(*)
Capital lease 1.17 .27(*) .86 .03(*)
Other(2) 5.23 4.15 .55 .58
Financial management(3) 3.25 .31(*) 2.89 .09(*)
Transaction 2.07 .26(*) 1.76 .09(*)
Cash-management .18(*) .03(*) .15(*) .00(*)
Credit-related .14(*) .07(*) .07(*) .00(*)
Brokerage .14(*) .01(*) .14(*) .00(*)
Trust and pension .95 .02(*) .93 .00(*)
(1.) See table 4, note 2.
(2.) See table 4, note 3.
(3.) See table 4, note 5.
(*) Fewer than fifteen firms reported using this supplier,
too small a number on which to base a reliable statistic.
USE OF FINANCIAL SERVICES SUPPLIERS, BY SERVICE The data reviewed thus far have examined separately the use of financial services by firm characteristics and the sources of financial services by firm type. This section reports on the types of financial services provided to small businesses by each type of financial service supplier. Suppliers of Checking and Savings Services As in 1993, commercial banks dominated dom·i·nate v. dom·i·nat·ed, dom·i·nat·ing, dom·i·nates v.tr. 1. To control, govern, or rule by superior authority or power: the provision of checking services to small businesses in 1998, supplying these services to 86 percent of all firms surveyed (table 6). Savings institutions and credit unions were sources for fewer than 5 percent of firms. No other single type of supplier provided more than a trivial TRIVIAL. Of small importance. It is a rule in equity that a demurrer will lie to a bill on the ground of the triviality of the matter in dispute, as being below the dignity of the court. 4 Bouv. Inst. n. 4237. See Hopk. R. 112; 4 John. Ch. 183; 4 Paige, 364. share of checking services. Commercial banks were also the dominant supplier of savings services, far outpacing the next most common providers (thrift institutions and brokerage firms). Suppliers of Lines of Credit, Loans, and Capital Leases Commercial banks were also the most common supplier of lines of credit, loans, and capital leases in 1998; about 39 percent of small businesses had a credit line, loan, or capital lease from a commercial bank at the end of 1998 (compared with 41 percent of firms at the end of 1993). Nondepository financial institutions and family and individuals were also important suppliers; in 1998, as in 1993, about 20 percent of firms obtained credit lines from or had outstanding loan or capital lease balances with nondepository financial institutions (specifically, finance companies and leasing companies); 6 percent had loans from family and individuals (compared with 9 percent in 1993). Although suppliers other than commercial banks were important sources of credit, commercial banks were three times more likely than finance companies, five times more likely than leasing companies, and about six times more likely than family or individuals to be the source of these services for small businesses in 1998. Credit lines were supplied almost exclusively by commercial banks: About 25 percent of firms obtained credit lines from commercial banks, compared with about 2 percent for the next most important source, finance companies. Vehicle loans were obtained mainly from commercial banks (11 percent of firms) and finance companies (about 8 percent). Equipment loans were also obtained mainly from these sources, with finance companies used at about half the rate of commercial banks. The only type of credit service that was not provided mainly by commercial banks was capital leases, which were twice as likely to be obtained from leasing companies as from commercial banks or finance companies; however, only about 11 percent of small businesses had a capital lease in 1998. Finally, family and individuals provided "other" loans at about the same rate as did commercial banks. Suppliers of Financial Management Services Commercial banks were the dominant supplier of financial management services, serving about 38 percent of small businesses in 1998. Brokerages, the second most common source of these services, were used by about 10 percent of firms. Brokerages were the leading provider of both brokerage services and trust and pension services, and commercial banks were the leading provider of transaction, cash-management, and credit-related services. SUMMARY The 1998 Survey of Small Business Finances provides detailed information on the characteristics of small businesses and on the types and sources of credit and other financial services they use. Although the discussion in this article is based on descriptive statistics descriptive statistics see statistics. , the data suggest interesting behavior patterns and differences in the use of credit by small businesses. (Standard errors for the differences have not been calculated, so it is uncertain whether these differences are statistically significant.) The 1998 survey is the third in a series of surveys of small businesses sponsored by the Board of Governors. Straightforward comparisons reveal some remarkable similarities in the findings from the 1998 and 1993 surveys. In particular, commercial banks continued in 1998 to be the dominant source of financial services for small businesses, including checking and savings accounts, loans of all types except capital leases, and all financial management services other than brokerage services and trust and pension services. Comparisons also reveal some changes over the period between surveys. Minority- and female-owned firms accounted for a larger proportion of small businesses in 1998. The incidence of vehicle, equipment, and "other" loans declined somewhat over the period, while the incidence of lines of credit and mortgages increased. Some of the differences are undoubtedly due to differences in the economic climate in which small businesses operated during 1993 and 1998. Explaining the differences and, more fundamentally, understanding the factors that affect small business financing require a rigorous analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. framework that accounts for the financial characteristics of borrowers and the markets in which they operate. Although such analysis is beyond the scope of this article, the final survey data will provide considerable opportunities for more formal and complete analyses. (1.) U.S. Small Business Administration, Office of Advocacy The act of Pleading or arguing a case or a position; forceful persuasion. , Small Business FAQ (Frequently Asked Questions) A group of commonly asked questions about a subject along with the answers. Vendors often display them on their Web sites for use as troubleshooting guidelines. , December 2000. For more information on small businesses' role in the economy, see U.S. Small Business Administration, Office of Advocacy, 1998 State of Small Business, chap (Challenge Handshake Authentication Protocol) An access control protocol for dialing into a network that provides a moderate degree of security. When the client logs onto the network, the network access server (NAS) sends the client a random value (the . 2 (http:// www.sba.gov/advo/stats/). (2.) The earlier surveys were called National Surveys of Small Business Finances. For more information about the 1987 survey, see Gregory E. Elliehausen and John D. Wolken, "Banking Markets and the Use of Financial Services by Small and Medium-Sized Me´di`um-sized` a. 1. Having a medium size; as, a medium-sized man s>. Adj. 1. medium-sized - intermediate in size medium-size, moderate-size, moderate-sized Businesses," Federal Reserve Bulletin, vol. 76 (October October: see month. 1990), pp. 801-17. For more information about the 1993 survey, see Rebel A. Cole and John D. Wolken, "Financial Services Used by Small Businesses: Evidence from the 1993 National Survey of Small Business Finances," Federal Reserve Bulletin, vol. 81 (July July: see month. 1995), pp. 629-67. For more information on the earlier surveys, see the Board's public web site (http://www.federalreserve.gov/pubs/oss/oss3/nssbftoc.htm). (3.) Firms whose fiscal years ended between July 1 and December 31, 1998, reported data for fiscal year 1998; otherwise, firms reported data for fiscal year 1999. For simplicity Simplicity is the property, condition, or quality of being simple or un-combined. It often denotes beauty, purity or clarity. Simple things are usually easier to explain and understand than complicated ones. Simplicity can mean freedom from hardship, effort or confusion. , results from the 1998 survey are referred to in this article as 1998 data. (4.) The data cited in this article are weighted to adjust for differences in sampling and response rates. They reflect population rather than sample measures. For further information on the survey process, see the appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. . (5.) The remaining data editing work primarily involves imputing missing values In statistics, missing values are a common occurrence. Several statistical methods have been developed to deal with this problem. Missing values mean that no data value is stored for the variable in the current observation. . Because the discussion in this article is based on questions that were answered by the vast majority of respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. , the statistics presented here, although based on preliminary data, will not differ much from those based on final data. The differences reported in this article are based only on the descriptive statistics presented. Standard errors for the differences have not yet been calculated, so it is uncertain whether the differences are statistically significant. (6.) A final data set will be available to the public through the Board's public web site by summer 2001 (http://www.federalreserve. gov/pubs/oss/oss3/nssbftoc.htm). (7.) The number of commercial banks and thrifts operating in the United States declined from 13,090 in 1993 to 10,305 in 1998. (8.) The diminishing di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. separation among these three types of firms culminated in passage in 1999 of the Financial Services Modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, Act, which removed most of the remaining barriers. See Group of Ten, "Report on Consolidation in the Financial Sector" (Paris: Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD), (in French: Organisation de coopération et de développement économiques; OCDE) is an international organisation of thirty countries that accept the principles of representative democracy and a free market , January January: see month. 2001) (http://www.oecd.org/eco/Group-of-Ten/report-on-consolidation.htm). (9.) Economic conditions in 1998 were much more similar to those faced by the businesses surveyed in 1987, when the economy was well into the 1982-90 expansion. Council of Economic Advisors, Economic Report of the President The Economic Report of the President is a document published by the President of the United States' Council of Economic Advisers (CEA). Released in February of each year, the report reviews what economic activity was of impact in the previous year, outlines the economic goals for , January 2001 (http://w3.access.gpo. gov/eop). (10.) The questions were worded slightly differently. The 1998 survey asked, "What is the single most important problem facing your business today?" and the 1993 survey asked, "What do you think will be the most important issue affecting your finn over the next twelve months?" (11.) An important objective of the survey was to provide data to examine credit access by different firm and owner characteristics, including race and ethnicity. Because minority-owned businesses constitute a small proportion of the population of small businesses, the sample was designed to overrepresent minority-owned finns. As a result, the sample included sufficient numbers of observations to permit comparisons between minority-owned and other types of small businesses. For details, see the appendix. (12.) Number of employees includes owners working in the business and both full- and part-time part-time adj. For or during less than the customary or standard time: a part-time job. part employees. (13.) The organizational forms have different rules about liability and taxes. Sole proprietors receive all the income from the business and bear full liability for its obligations. Partnerships have more than one owner; like sole proprietors, the owners receive all the income from the business and, in general, are fully liable liable adj. responsible or obligated. Thus, a person or entity may be liable for damages due to negligence, liable to pay a debt, liable to perform an act for which he/she/it contracted to do, or liable to punishment for commission of a crime. for its obligations. Corporations are separate legal entities, and the owners' liability is limited to the amount of their original equity investment. The primary difference between the two types of corporations is how they are taxed: S corporations are not subject to corporate income tax, whereas C corporations are. S corporations are legally constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. to have more than seventy-five shareholders, are restricted to one class of stock, and must pass all finn income to the owners at the end of each fiscal year. During the 1990s, two other organizational forms gained legal status in many states: the limited liability corporation (LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ) and the limited liability partnership (LLP LLP - Lower Layer Protocol ). LLCs have many characteristics of partnerships but have the limited liability of corporations; LLPs are partnerships in which an investor's liability is limited to his or her initial investment. LLCs may file taxes as a partnership, a corporation, or a sole proprietorship; LLPs may file taxes as a partnership or a corporation. For this survey, LLCs and LLPs were classified according to how they chose to file their taxes. The 1998 data imply that in the survey universe, 0.2 percent of the finns were LLCs and 1.8 percent were LLPs at year-end 1998. (14.) By U.S. government convention, race and ethnicity are separate categories. Thus, firm owners can be Hispanic (or non-Hispanic) and of any race. The 1998 survey asked about Hispanic ethnicity and race in two separate questions. Firms were asked if the owner (for single-owner firms) or owners of more than 50 percent of the firm (for multi-owner firms) were of Hispanic, Latino, or Spanish Spanish, river, c.150 mi (240 km) long, issuing from Spanish Lake, S Ont., Canada, NW of Sudbury, and flowing generally S through Biskotasi and Agnew lakes to Lake Huron opposite Manitoulin island. There are several hydroelectric stations on the river. descent descent, in anthropology, method of classifying individuals in terms of their various kinship connections. Matrilineal and patrilineal descent refer to the mother's or father's sib (or other group), respectively. . Firms answering "yes" were classified as Hispanic-owned. Firms were then asked to specify the race of the owner (for single-owner firms) or the races(s) of the owner(s) of more than 50 percent of the firm (for multi-owner firms) from the following list: white; black; Asian, including Native Hawaiian Hawaiian, member of the Polynesian group of the Austronesian family of languages. Of the fewer than 10,000 people who speak Hawaiian, only a few hundred are native speakers, but the language is taught in some Hawaiian schools and remains important as a symbol of or other Pacific Islander Pacific Islander n. 1. A native or inhabitant of any of the Polynesian, Micronesian, or Melanesian islands of Oceania. 2. A person of Polynesian, Micronesian, or Melanesian descent. See Usage Note at Asian. ; and American Indian American Indian or Native American or Amerindian or indigenous American Any member of the various aboriginal peoples of the Western Hemisphere, with the exception of the Eskimos (Inuit) and the Aleuts. or Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States Native. In this article, the category minority-owned indicates ownership by individuals who are nonwhite or Hispanic or both. The few firms reporting that their ownership shares were equally split between minority and non-minority individuals were classified as non-minority-owned. (15.) For this article, use of a financial service was measured by the percentage of small businesses that used a specific type or source of service. Data on use based on dollar amounts or numbers of accounts will be available at a later date. However, previous analysis has shown that conclusions based on dollar amounts, or on number of accounts, are usually qualitatively qual·i·ta·tive adj. Of, relating to, or concerning quality. [Middle English, producing a primary quality, from Medieval Latin qu very similar to conclusions based on the percentages of firms using one or more service or source. See Rebel A. Cole, John D. Wolken, and R. Louise Louise (ləwēz`), 1776–1810, queen of Prussia, consort of Frederick William III; a princess of Mecklenburg-Strelitz. During the Napoleonic Wars her patriotism and bravery won her lasting popularity. Woodburn Woodburn is the name of several places in the United States of America:
adj. Of, relating to, or done by a business or an institution that is not a bank but performs similar services. Competition for Small Business Credit: Evidence from the 1987 and 1993 National Surveys of Small Business Finances," Federal Reserve Bulletin, vol. 82 (November November: see month. 1996), pp. 983-95. (16.) Respondents were asked to count as a business service any personal account that was used at least 50 percent of the time for business purposes. Most of the firms that reported using no financial service were extremely small, and it is possible that those firms' owners used personal accounts for business purposes, but did so less than 50 percent of the time. (17.) Checking accounts were defined as accounts with unlimited check-writing privileges privileges, n the authority granted to a physician or dental professional by a hospital governing board to provide patient care in the hospital. Clinical privileges are limited to the individual's license, experience, and competence. , including share draft accounts; money market accounts, including money market deposit accounts, were considered checking accounts only if they offered unlimited check-writing privileges. Savings accounts were defined as passbook savings, credit union share accounts, certificates of deposits, and other time deposits; also considered savings accounts were money market accounts that were limited in either the number or the amount of checks that could be written. In comparison with small businesses, 91.5 percent of households had some type of transaction account (checking account, saving account, money market deposit account, money market mutual fund, or call account at a brokerage) in 1998, according to the 1998 Survey of Consumer Finances The Survey of Consumer Finances (SCF) is a triennial survey of the balance sheet, pension, income, and other demographic characteristics of U.S. families. The survey also gathers information on the use of financial institutions. The study is sponsored by the U.S. . For more information, see Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism B. Kennickell, Martha Martha, in the New Testament, friend of Jesus, sister of Mary and Lazarus of Bethany. In Christian literature, Martha has been a symbol of the active, as opposed to the contemplative, life. Feast: July 29. Martha personification of the busy housekeeper. Starr-McCluer, and Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. J. Surette, "Recent Changes in U.S. Family Finances: Results from the 1998 Survey of Consumer Finances," Federal Reserve Bulletin, vol. 86 (January 2000), pp. 1-29. (18.) "Other" loans are any loans that could not be classified as credit lines, capital leases, mortgages used for commercial purposes, motor vehicle loans, or equipment loans (generally, unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. term loans). (19.) For research on this topic using multivariate analysis multivariate analysis, n a statistical approach used to evaluate multiple variables. multivariate analysis, n a set of techniques used when variation in several variables has to be studied simultaneously. , see, for example, Ken S. Cavalluzzo, Linda A set of parallel processing functions added to languages, such as C and C++, that allows data to be created and transferred between processes. It was developed by Yale professor David Gelernter, when he was a 23-year old graduate student. C. Cavalluzzo, and John D. Wolken, "Competition, Small Business Financing, and Discrimination: Evidence from a New Survey," Journal of Business (forthcoming). (20.) Transaction services cover the provision of paper money and coins, the processing of credit card receipts, the collection of night deposits, and wire transfers. Cash-management services include the provision of sweep accounts Sweep Account A bank account that, at the close of each business day, automatically transfers amounts that exceeds (or falls short of) a certain level into a higher-interest earning account. , zero-balance accounts Zero-balance account (ZBA) A checking account in which zero balance is maintained by transfers of funds from a master account in an amount only large enough to cover checks presented. , lockbox Lockbox A collection and processing service provided to firms by banks, which collect payments from a dedicated postal box to which the firm directs its customers to send payment to. services, and other services designed to automatically invest liquid funds in liquid, interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid assets. Credit-related services are the provision of bankers acceptances, letters of credit, sales finance, and factoring. Trust and pension services consist of the provision of 401(k) plans, pension funds, business trusts, and securities safekeeping Safekeeping The storage of assets or other items of value in a protected area. Notes: Individuals may use self-directed methods of safekeeping or the services of a bank or brokerage firm. . (21.) The amount charged in a typical month and the amount repaid in the same month were also asked in the survey. (22.) Information on the sources of trade credit, credit cards, and owner loans was not collected. (23.) The percentage of firms that obtained financial services from commercial banks might have been larger had the suppliers of credit cards been included in the calculations, as many business and personal credit cards are issued by commercial banks. (24.) This figure may understate un·der·state v. un·der·stat·ed, un·der·stat·ing, un·der·states v.tr. 1. To state with less completeness or truth than seems warranted by the facts. 2. the true role of government in providing financial services to small businesses. Many entities, such as the U.S. Small Business Administration, provide credit guarantees, which ensure repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of small business loans made by institutional lenders such as commercial banks and thrift institutions. (25.) Dun's Marketing Service, Dun & Bradstreet Brad·street , Anne Dudley 1612-1672. English-born colonial poet who wrote several collections of verse, including The Tenth Muse Lately Sprung Up in America (1650). , Inc. (26.) See Bruce Phillips Bruce Phillips (born 2 May 1929) is a former Australian rules footballer who played with St Kilda in the VFL. A fullback, Phillips won the Trevor Barker Award in 1950 for St Kilda's best and fairest player and finished equal 3rd in the Brownlow Medal count. and Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. Kirchhoff Kirch·hoff , Gustav Robert 1824-1887. German physicist noted for his research in spectrum analysis, optics, and electricity. Noun 1. , "Formation, Growth, and Survival: Small Firm Dynamics in the U.S. Economy," Small Business Economics, vol. 1 (1989), pp. 65-74. (27.) Of the approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 13,000 firms that did not complete the screening process, about 6,000 declined to participate. Of the remainder, the majority could not be contacted for various reasons. (28.) John D. Wolken, Catherine Haggerty, Karen Karen Any member of a variety of tribal peoples of southern Myanmar (Burma). Constituting the second largest minority in Myanmar, the Karen are not a unitary group in any ethnic sense, as they differ among themselves linguistically, religiously, and economically. Grigorian, and Rachel Rachel, in the Bible Rachel (rā`chəl), in the Bible, wife of Jacob and mother of Joseph and Benjamin. She is one of the four Jewish matriarchs. An alternate form is Rahel. Harter, "The 1998 Survey of Small Business Finances: Sampling and Level of Effort Associated with Gaining Cooperation from Minority-Owned Businesses," paper presented at the International Conference on Establishment Surveys II, June June: see month. 2000, Buffalo, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (forthcoming in ICES II conference proceedings). (29.) The response rate for the 1993 survey was 47 percent. The decline in response rate is generally consistent with a decline in response rates in many recent scientific surveys, including those of the U.S. Census Bureau Noun 1. Census Bureau - the bureau of the Commerce Department responsible for taking the census; provides demographic information and analyses about the population of the United States Bureau of the Census . There are several possible reasons for the lower rate. Interviews were conducted several months after screening, allowing time for businesses to become defunct DEFUNCT. A term used for one that is deceased or dead. In some acts of assembly in Pennsylvania, such deceased person is called a decedent. (q.v.) and also requiring that businesses cooperate twice instead of once. Also, many of the main interviews were completed near January 1, 2000, when many businesses were busy and therefore less willing to participate. (30.) For both the screening and the main interviews, the total time per completed interview is the total number of interview hours for all cases, whether the interview was completed or not, divided by the number of completed cases. APPENDIX: SURVEY METHODS The 1998 Survey of Small Business Finances, conducted in 1999 and 2000 by the National Opinion Research Center (NORC NORC National Opinion Research Center NORC Naturally Occurring Retirement Community NORC National Organization for Research at the University of Chicago NORC Naval Ordnance Research Calculator NORC North Oakland Republican Club (Waterford, MI) ) for the Board of Governors, covered a nationally representative sample of small businesses. The target population was U.S. domestic for-profit for-prof·it adj. Established or operated with the intention of making a profit: a for-profit organization. , nonfinancial, nonsubsidiary, non-agricultural, nongovernmental businesses with fewer than 500 employees that were in operation on December 31, 1998. The sample was drawn from the Dun & Bradstreet Market Identifier file.(25) The Market Identifier file is broadly representative of all businesses in the United States (though it may underrepresent un·der·rep·re·sent tr.v. un·der·rep·re·sent·ed, un·der·rep·re·sent·ing, un·der·rep·re·sents To imply or suggest a lower amount, quantity, quality, or degree of than is actually present: many of the newest and smallest businesses). It has been estimated that the Dun & Bradstreet database covers approximately 93 percent of full-time full-time adj. Employed for or involving a standard number of hours of working time: a full-time administrative assistant. full business activity.(26) The 1998 Statistics of U.S. Businesses from the U.S. Small Business Administration provides a comparison population (http://www.sba.gov/advo/stats/ data.html) for the population obtained from the Dun & Bradstreet file. These data are compiled by the U.S. Census Bureau and contain virtually the entire universe of private-sector businesses with positive payroll payroll a list of employees, their salary rates, tax deductions, amounts paid, payroll tax, long service leave entitlements. , excluding farms (SIC 01-02), railroads rail·road n. 1. A road composed of parallel steel rails supported by ties and providing a track for locomotive-drawn trains or other wheeled vehicles. 2. (SIC 40), the Postal Service postal service, arrangements made by a government for the transmission of letters, packages, and periodicals, and for related services. Early courier systems for government use were organized in the Persian Empire under Cyrus, in the Roman Empire, and in medieval (SIC 43), private households (SIC 88), and pension, health, and welfare funds with at least 100 employees (SIC 6371). The data show that about 61 percent of firms have fewer than five employees (compared with 64 percent of the survey population), 38 percent were in business and professional services (compared with 43 percent), and 21 percent were in retail trade (compared with 19 percent). In addition, about 83 percent were located in urban areas (compared with about 80 percent) and 21 percent were in the Northeast, 23 percent in the Midwest, 32 percent in the South, and 23 percent in the West (compared with 19 percent, 22 percent, 33 percent, and 27 percent respectively). Sampling was done according to a two-stage stratified stratified /strat·i·fied/ (strat´i-fid) formed or arranged in layers. strat·i·fied adj. Arranged in the form of layers or strata. random design. In the first stage, the sample was stratified by number of employees, Census division The term Census division or Census Division is officially used for the Census divisions of Canada and the Census divisions of the United States. • • , and urban/rural status. Because larger small businesses (those with twenty or more employees) account for a small proportion of the target population, those firms were sampled at a rate greater than their proportion in the population to ensure a large enough sample to permit comparisons with smaller small businesses. A sample of nearly 40,000 firms was selected in this first stage, representing 7.5 million firms in the Market Identifier file; 27,000 completed the screening process, and nearly 20,000 were determined to be part of the target population, representing about 5.3 million firms.(27) Besides verifying ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. eligibility, the screening was designed to collect information on minority ownership (where a minority-owned finn was defined as one more than 50 percent owned by individuals who are Hispanic, Latino, or of Spanish descent; Asian, Native Hawaiian, or other Pacific Islander; black; or American Indian or Alaska Native), information not reliably available in the Dun & Bradstreet file.(28) In the second stage, the sample was stratified by number of employees, Census division, urban/rural status, and minority ownership (black, Asian, Hispanic, and "other"). Like relatively larger small businesses, minority-owned firms account for only a small percentage of the population of small businesses but are of special interest to researchers and policymakers. For these reasons, such firms were oversampled to ensure that their numbers would be sufficient to allow for statistical comparisons between them and other firms. Of the 20,000 firms determined to be part of the target population, only 11,000 were asked to participate in the main interview (the second stage), as the screened sample contained a surplus of small, nonminority-owned firms. Of these 11,000 firms, 3,561 completed the main interview, for a response rate of 33 percent.(29) The results presented in this article have been weighted to allow for different rates of sampling and different rates of response. The estimates provided are representative of the eligible portion of the Dun & Bradstreet frame. Before the screening, firms were mailed a brochure A brochure or pamphlet is a leaflet advertisement. Brochures may advertise locations, events, hotels, products, services, etc. They are usually succinct in language and eye-catching in design. describing the survey. They were contacted by telephone and asked to complete a short computer-assisted telephone interview to verify (1) To prove the correctness of data. (2) In data entry operations, to compare the keystrokes of a second operator with the data entered by the first operator to ensure that the data were typed in accurately. See validate. their eligibility. The screening interview took about five minutes. The total time required by NORC to contact firms and administer To give an oath, as to administer the oath of office to the president at the inauguration. To direct the transactions of business or government. Immigration laws are administered largely by the Immigration and Naturalization Service. all interviews, whether completed or not, averaged about thirty-nine minutes per completed screening interview.(30) Firms selected for the main interview were sent further information about the survey and a customized worksheet See spreadsheet. worksheet - spreadsheet to help them consult their records before the interview. The worksheet requested financial data for the firm and information about the financial services used by the firm and the sources of those services. The worksheet differed according to the firm's legal organizational form and directed respondents to the appropriate lines on their tax forms. The main interview, also a computer assisted telephone interview, took about forty minutes. However, the total time spent by NORC, including the time spent trying to contact and convert nonrespondents, averaged nearly seven hours per completed case. Most of the time it took to complete the interviews was spent establishing contact, setting appointments with business owners, reestablishing contact when interviews were broken off by respondents, and trying to persuade TO PERSUADE, PERSUADING. To persuade is to induce to act: persuading is inducing others to act. Inst. 4, 6, 23; Dig. 11, 3, 1, 5. 2. In the act of the legislature which declared that "if any person or persons knowingly and willingly shall aid or assist any reluctant owners to complete the interview. The information collected from each business fits into the following categories: demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. of the firm and its primary owner; the firm's use of financial services and the sources providing the services; applications for credit by the firm in the past three years; balance sheet data; and recent credit history of the firm and its owners. A public-use version of the data set and a user's manual will be posted on the Federal Reserve Board's web site after completion of data editing and other processing steps (www. federalreserve.gov/pubs/oss/oss3/nssbftoc.htm).
A.1. Characteristics of small business, distributed by selected
category of firm, 1998
Majority owners
Category All
firms
Non- Non- Male
white or Hispanic
Hispanic white
All firms 100.00 100.00 100.00 100.00
Number of employees(1)
0-1 21.86 20.78 22.01 20.13
2-4 41.78 48.17 40.60 41.04
5-9 19.78 18.36 20.04 20.60
10-19 8.39 7.46 8.60 8.89
20-49 5.47 3.82 5.79 6.27
50-99 1.55 1.08 1.63 1.66
100-499 1.17 .31 1.32 1.39
Fiscal year sales
(thousands of
dollars)
Less than 25 16.34 20.84 15.42 12.98
25-49 9.48 10.66 9.24 8.38
50-99 14.22 19.19 13.46 14.16
100-249 21.72 18.43 22.20 22.58
250-499 13.29 14.16 13.17 14.19
500-999 10.27 8.04 10.71 11.00
1,000-2,499 7.83 4.98 8.37 8.83
2,500-4,999 3.28 2.00 3.52 3.77
5,000-9,999 1.56 .97 1.68 1.89
10,000 or more 1.79 .46 2.02 2.11
End-of-year assets
(thousands of
dollars)
Less than 25 34.72 41.57 33.42 30.86
25-49 12.57 10.79 12.95 12.86
50-99 13.94 16.98 13.45 14.53
100-249 15.86 13.92 16.22 16.38
250-499 8.74 7.36 8.89 9.52
500-999 5.99 3.47 6.46 6.83
1,000-2,499 4.22 3.30 4.40 4.61
2,500-4,999 1.54 .72 1.68 1.79
5,000 or more 1.51 .30 1.73 1.85
Organizational form
Proprietorship 49.35 54.63 48.27 46.80
Partnership 6.95 7.94 6.75 7.11
S corporation 23.87 22.42 24.26 25.15
C corporation 19.83 15.01 20.72 20.94
Standard industrial
classification
Construction and
mining (10-19) 11.87 7.42 12.71 13.98
Primary manufacturing
(20-29) 3.66 2.52 3.88 3.51
Other manufacturing
(30-39) 4.68 3.63 4.89 5.27
Transportation (40-49) 3.72 4.03 3.69 3.80
Wholesale trade
(50-51) 7.15 6.75 7.26 8.13
Retail trade (52-59) 18.95 21.23 18.65 17.51
Insurance agents and
real estate
(60-69) 6.48 5.00 6.77 6.78
Business services
(70-79) 24.83 31.60 23.49 23.02
Professional services
(80-89) 18.46 17.83 18.42 17.95
Years under current
ownership
0-4 22.37 29.71 21.01 20.36
5-9 22.79 24.45 22.45 21.68
10-14 19.14 20.59 18.97 19.30
15-19 13.05 10.50 13.55 13.42
20-24 8.72 6.37 9.10 9.60
25 or more 13.75 8.38 14.71 15.45
Census region of main
office
Northeast 18.90 15.86 19.31 19.65
New England 5.21 .97(*) 5.87 5.00
Middle Atlantic 13.69 14.88 13.44 14.65
Midwest 21.80 10.44 23.77 22.28
East North Central 14.56 7.23 15.79 15.27
West North Central 7.24 3.21 7.98 7.02
South 32.71 37.01 32.07 32.69
South Atlantic 16.88 19.44 16.45 16.59
East South Central 5.47 2.43 6.03 5.76
West South Central 10.35 15.14 9.59 10.34
West 26.59 36.69 24.85 25.38
Mountain 6.63 7.05 6.54 6.88
Pacific 19.96 29.64 18.31 18.50
Urbanization at main
office
Urban 79.91 89.63 78.19 79.80
Rural 20.09 10.37 21.81 20.20
Number of offices
One 87.75 89.18 87.51 86.47
Two 8.55 7.37 8.76 9.21
Three or more 3.63 3.45 3.64 4.22
Sales area
Primarily within U.S. 95.43 93.63 95.76 95.20
International or
global 4.51 6.37 4.16 4.71
Owners' participation
Owner management 92.33 93.36 92.11 92.24
Hired management 7.52 6.64 7.72 7.70
Race, ethnicity, and
sex of majority
owners
Nonwhite or Hispanic 14.60 100.00 ... 14.18
Non-Hispanic white 84.88 ... 100.00 85.25
White 90.12 35.79 100.00 90.70
Black 4.12 28.21 ... 3.77
Asian or Pacific
Islander 4.38 29.97 ... 4.14
American Indian or
Alaska Native .81 5.58 ... .77
Hispanic 5.59 38.29 ... 5.78
Non-Hispanic 94.10 61.51 100.00 93.85
Female 24.32 26.48 23.98 ...
Male 71.88 68.48 72.41 95.14
Ownership equally
divided by sex 3.67 4.90 3.49 4.86
Majo- Number of employees(1)
rity
owners
Category
Female 0-1 2-4 5-19
All firms 100.00 100.00 100.00 100.00
Number of employees(1)
0-1 27.34 100.00 ... ...
2-4 44.12 ... 100.00 ...
5-9 17.31 ... ... 70.22
10-19 6.62 ... ... 29.78
20-49 3.01 ... ... ...
50-99 1.13 ... ... ...
100-499 .46 ... ... ...
Fiscal year sales
(thousands of
dollars)
Less than 25 26.85 39.64 16.42 2.73
25-49 12.97 18.86 11.69 1.52(*)
50-99 14.40 18.51 20.53 5.46
100-249 18.99 16.81 29.38 20.22
250-499 10.56 3.96 13.22 23.18
500-999 8.04 1.09(*) 4.86 24.48
1,000-2,499 4.74 .71(*) 2.68 15.16
2,500-4,999 1.62 ... .32(*) 4.90
5,000-9,999 .55 .23(*) .33(*) .94(*)
10,000 or more .74 .02(*) .20(*) 1.32(*)
End-of-year assets
(thousands of
dollars)
Less than 25 46.91 62.13 40.46 13.92
25-49 11.64 13.01 15.77 10.51
50-99 12.17 10.44 15.71 16.64
100-249 14.30 8.02 16.42 22.77
250-499 6.37 3.71 5.84 16.46
500-999 3.26 1.23(*) 2.77 10.86
1,000-2,499 2.84 .42(*) 1.70 5.19
2,500-4,999 .78 .08(*) .36(*) 1.28(*)
5,000 or more .40 ... .07(*) 1.34(*)
Organizational form
Proprietorship 57.53 82.72 55.08 26.98
Partnership 6.48 1.17(*) 10.00 7.32
S corporation 19.75 9.85 20.50 35.08
C corporation 16.25 6.26 14.42 30.62
Standard industrial
classification
Construction and
mining (10-19) 5.41 12.19 10.91 12.59
Primary manufacturing
(20-29) 4.11 3.00 3.51 3.68
Other manufacturing
(30-39) 2.88 3.03 4.43 4.63
Transportation (40-49) 3.47 2.98 3.13 4.89
Wholesale trade
(50-51) 3.98 4.19 7.21 8.84
Retail trade (52-59) 23.40 13.89 17.42 23.93
Insurance agents and
real estate
(60-69) 5.57 7.28 6.54 6.76
Business services
(70-79) 30.40 32.08 27.20 18.86
Professional services
(80-89) 20.12 21.11 19.39 15.71
Years under current
ownership
0-4 28.46 27.62 24.62 17.56
5-9 26.34 24.06 24.08 21.24
10-14 18.74 17.89 19.70 20.21
15-19 11.98 10.45 11.26 16.42
20-24 5.99 7.41 7.97 9.95
25 or more 8.48 12.44 12.15 14.45
Census region of main
office
Northeast 16.66 20.92 19.63 17.20
New England 5.90 5.98 5.28 4.46
Middle Atlantic 10.75 14.94 14.35 12.75
Midwest 20.37 19.51 22.00 22.36
East North Central 12.41 12.84 14.45 15.91
West North Central 7.96 6.68 7.55 6.45
South 32.59 32.36 33.50 32.31
South Atlantic 17.72 17.59 16.99 16.10
East South Central 4.46 3.70 5.41 7.08
West South Central 10.41 11.07 11.10 9.12
West 30.38 27.21 24.88 28.13
Mountain 5.88 6.56 5.62 8.05
Pacific 24.50 20.65 19.26 20.08
Urbanization at main
office
Urban 80.33 81.91 78.86 79.42
Rural 19.67 18.09 21.14 20.58
Number of offices
One 91.87 96.58 91.10 84.40
Two 6.51 2.89 7.66 10.85
Three or more 1.62 .53(*) 1.24 4.50
Sales area
Primarily within U.S. 96.13 95.76 95.31 96.17
International or
global 3.87 4.24 4.69 3.66
Owners' participation
Owner management 92.97 98.75 94.46 87.04
Hired management 6.79 1.25(*) 5.44 12.59
Race, ethnicity, and
sex of majority
owners
Nonwhite or Hispanic 15.90 13.88 16.83 13.38
Non-Hispanic white 83.72 85.48 82.48 86.30
White 88.34 90.58 88.39 90.81
Black 5.21 3.88 5.34 3.40
Asian or Pacific
Islander 5.05 3.86 4.49 4.90
American Indian or
Alaska Native .95(*) 1.04(*) 1.02(*) .52(*)
Hispanic 5.03 5.27 6.47 4.78
Non-Hispanic 94.85 94.59 92.96 95.06
Female 100.00 30.42 25.68 20.67
Male ... 68.86 69.89 74.46
Ownership equally
divided by sex ... .73(*) 4.33 4.66
Number of Years under
employees(1) current ownership
Category
20-49 50-499 0-9 10 or
more
All firms 100.00 100.00 100.00 100.00
Number of employees(1)
0-1 ... ... 25.02 19.27
2-4 ... ... 45.06 39.04
5-9 ... ... 16.97 22.08
10-19 ... ... 7.23 9.37
20-49 100.00 ... 4.14 6.59
50-99 ... 57.01 1.15 1.87
100-499 ... 42.99 .43 1.78
Fiscal year sales
(thousands of
dollars)
Less than 25 .26(*) .99(*) 22.00 11.71
25-49 .18(*) 1.50(*) 10.29 8.80
50-99 .54(*) 1.15(*) 15.03 13.61
100-249 .94(*) .66(*) 20.93 22.36
250-499 6.06 1.58(*) 12.62 13.80
500-999 17.65 5.02(*) 9.19 11.10
1,000-2,499 35.21 13.38 6.07 9.32
2,500-4,999 22.26 20.22 1.91 4.43
5,000-9,999 11.36 18.03 .59 2.36
10,000 or more 5.55 37.47 1.18 2.29
End-of-year assets
(thousands of
dollars)
Less than 25 3.15(*) 5.41(*) 41.64 29.07
25-49 2.66(*) 1.01(*) 13.23 12.06
50-99 7.10 .52(*) 13.75 14.13
100-249 12.60 5.13 14.31 17.08
250-499 12.88 5.40 8.33 9.10
500-999 22.54 10.15 4.20 7.32
1,000-2,499 26.00 19.62 2.45 5.69
2,500-4,999 8.09 20.96 .75 2.20
5,000 or more 4.47 31.36 .73 2.16
Organizational form
Proprietorship 8.55 7.07(*) 50.91 48.18
Partnership 3.86 8.96 7.12 6.84
S corporation 39.58 40.77 25.25 22.79
C corporation 48.00 43.20 16.73 22.19
Standard industrial
classification
Construction and
mining (10-19) 13.39 13.77 10.14 13.35
Primary manufacturing
(20-29) 5.59 7.04 3.40 3.88
Other manufacturing
(30-39) 10.43 10.68 4.75 4.64
Transportation (40-49) 3.98 6.13 4.32 3.24
Wholesale trade
(50-51) 9.36 8.13 6.67 7.47
Retail trade (52-59) 24.73 19.77 21.13 17.20
Insurance agents and
real estate
(60-69) 3.69(*) 1.81(*) 5.15 7.51
Business services
(70-79) 13.85 14.34 26.97 23.08
Professional services
(80-89) 14.97 18.16 17.24 19.48
Years under current
ownership
0-4 14.80 10.83 49.54 ...
5-9 19.38 15.53 50.46 ...
10-14 15.17 17.59 ... 35.62
15-19 18.24 16.38 ... 23.88
20-24 13.25 8.60 ... 15.94
25 or more 19.17 30.92 ... 25.16
Census region of main
office
Northeast 15.09 16.75 16.98 20.46
New England 6.48 3.29 5.31 5.15
Middle Atlantic 8.61 13.46 11.67 15.31
Midwest 26.61 21.42 21.31 22.26
East North Central 16.11 12.67 14.35 14.77
West North Central 10.50 8.75 6.97 7.49
South 29.37 34.26 34.91 30.82
South Atlantic 15.89 19.68 19.41 14.77
East South Central 5.35 4.43 5.34 5.60
West South Central 8.13 10.16 10.16 10.44
West 28.93 27.56 26.79 26.46
Mountain 7.87 5.55 6.66 6.57
Pacific 21.06 22.01 20.13 19.88
Urbanization at main
office
Urban 80.37 84.33 81.59 78.54
Rural 19.63 15.67 18.41 21.46
Number of offices
One 66.67 42.52 89.44 86.41
Two 20.19 20.67 7.91 9.10
Three or more 13.14 36.81 2.60 4.49
Sales area
Primarily within U.S. 94.11 89.69 94.47 96.30
International or
global 5.58 10.31 5.53 3.67
Owners' participation
Owner management 85.77 75.85 93.10 91.84
Hired management 14.23 24.15 6.83 8.11
Race, ethnicity, and
sex of majority
owners
Nonwhite or Hispanic 10.20 7.49 17.51 12.24
Non-Hispanic white 89.80 92.20 81.68 87.46
White 95.49 95.02 87.92 91.90
Black .55(*) 1.87 4.96 3.44
Asian or Pacific
Islander 3.74 2.71 5.25 3.66
American Indian or
Alaska Native .22(*) .10(*) .98(*) .68(*)
Hispanic 5.68 2.88 6.64 4.74
Non-Hispanic 94.32 97.12 92.84 95.12
Female 13.36 14.26 29.51 20.11
Male 80.89 82.07 66.52 76.30
Ownership equally
divided by sex 5.64 2.97 3.83 3.55
Urbanization at Organization form
main office
Category
Urban Rural Pro- Other
prie-
tor-
ship
All firms 100.00 100.00 100.00 100.00
Number of employees(1)
0-1 22.40 19.69 36.64 7.46
2-4 41.23 43.98 46.63 37.06
5-9 19.53 20.77 13.12 26.26
10-19 8.46 8.08 2.27 14.34
20-49 5.51 5.35 .95 9.88
50-99 1.61 1.29 .29(*) 2.76
100-499 1.25 .83 .09(*) 2.21
Fiscal year sales
(thousands of
dollars)
Less than 25 15.85 18.25 26.39 6.54
25-49 9.55 9.21 15.39 3.73
50-99 14.05 14.93 19.35 9.23
100-249 21.50 22.59 21.96 21.48
250-499 13.61 12.02 9.40 17.08
500-999 10.58 9.01 5.17 15.23
1,000-2,499 7.87 7.69 1.79 13.73
2,500-4,999 3.10 4.02 .10(*) 6.38
5,000-9,999 1.73 .91 .10(*) 2.99
10,000 or more 1.96 1.08 .11(*) 3.41
End-of-year assets
(thousands of
dollars)
Less than 25 35.08 33.32 49.34 20.48
25-49 13.07 10.57 12.51 12.62
50-99 13.77 14.58 14.38 13.50
100-249 15.78 16.14 13.16 18.48
250-499 8.15 11.06 5.67 11.73
500-999 5.70 7.14 2.25 9.64
1,000-2,499 4.34 3.75 1.25 7.11
2,500-4,999 1.52 1.61 .27(*) 2.78
5,000 or more 1.73 .66 .02(*) 2.97
Organizational form
Proprietorship 47.00 58.72 100.00 ...
Partnership 6.96 6.93 ... 13.73
S corporation 25.20 18.58 ... 47.13
C corporation 20.85 15.77 ... 39.15
Standard industrial
classification
Construction and
mining (10-19) 11.27 14.30 12.61 11.16
Primary manufacturing
(20-29) 3.57 4.00 3.18 4.12
Other manufacturing
(30-39) 4.66 4.75 3.00 6.32
Transportation (40-49) 3.90 2.98 2.24 5.16
Wholesale trade
(50-51) 7.53 5.62 3.92 10.30
Retail trade (52-59) 17.19 25.94 19.49 18.42
Insurance agents and
real estate
(60-69) 6.65 5.81 5.40 7.53
Business services
(70-79) 24.90 24.57 29.48 20.31
Professional services
(80-89) 20.15 11.74 20.47 16.50
Years under current
ownership
0-4 22.32 22.56 22.86 21.90
5-9 23.78 18.83 23.72 21.87
10-14 20.02 15.65 19.39 18.91
15-19 12.83 13.94 11.75 14.32
20-24 8.61 9.14 8.18 9.24
25 or more 12.26 19.67 14.04 13.47
Census region of main
office
Northeast 21.01 10.52 18.91 18.89
New England 5.45 4.29 5.47 4.97
Middle Atlantic 15.56 6.23 13.45 13.92
Midwest 19.40 31.34 20.30 23.25
East North Central 13.92 17.09 12.82 16.25
West North Central 5.48 14.25 7.48 7.01
South 31.21 38.65 31.12 34.26
South Atlantic 17.21 15.57 14.16 19.54
East South Central 3.99 11.39 5.12 5.82
West South Central 10.01 11.69 11.84 8.90
West 28.38 19.49 29.67 23.60
Mountain 5.89 9.56 5.94 7.30
Pacific 22.49 9.93 23.72 16.30
Urbanization at main
office
Urban 100.00 ... 76.10 83.63
Rural ... 100.00 23.90 16.37
Number of offices
One 87.43 89.00 93.19 82.45
Two 8.70 7.98 5.65 11.38
Three or more 3.78 3.02 1.16 6.03
Sales area
Primarily within U.S. 94.94 97.38 96.86 94.04
International or
global 5.00 2.54 3.14 5.84
Owners' participation
Owner management 91.95 93.83 96.15 88.60
Hired management 7.92 5.96 3.85 11.11
Race, ethnicity, and
sex of majority
owners
Nonwhite or Hispanic 16.37 7.54 16.16 13.08
Non-Hispanic white 83.04 92.17 83.01 86.69
White 89.11 94.13 88.84 91.36
Black 4.53 2.47 4.88 3.38
Asian or Pacific
Islander 5.05 1.70 4.54 4.21
American Indian or
Alaska Native .64 1.50(*) .90(*) .73(*)
Hispanic 6.45 2.18 6.15 5.04
Non-Hispanic 93.23 97.54 93.43 94.75
Female 24.44 23.82 28.34 20.39
Male 71.79 72.28 71.66 72.11
Ownership equally
divided by sex 3.67 3.70 ... 7.25
(1.) See text table 1, note 1.
(*) Fewer than fifteen firms in this category reported this
characteristic, too small a number on which to base a
reliable statistic.
... Not applicable.
Marianne This article is about the symbol of France. For other uses, see Marianne (disambiguation). Marianne, a national emblem of France, is a personification of Liberty and Reason. P. Bitler, Alicia M. Robb Robb is a surname, and may refer to
This distinguished name is of Norman, Old French origin, introduced into England after the Norman Conquest of 1066. Carter, Doug DOUG Dumb Old Utility Guy Rohde Rohde is a surname, and may refer to:
EMILY Electronic Membrane-Information Library EMILY Every Moment I Love You Rosenberg Rosenberg (rō`zənbərg), city (1990 pop. 20,183), Fort Bend co., S Tex., on the Brazos River, in an oil and natural gas area; inc. 1902. Rosenberg and its sister city of Richmond are physically one community. provided research assistance. |
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