The takeaway

Small businesses with lower credit risk tend to receive all the financing they seek more often than businesses with higher credit risk, which may be newer, smaller, and more in need of financing.

Small business credit 

Fed Small Business is a collection of resources related to, yes, small business. It provides economic research and analysis by the 12 Reserve Banks of the Federal Reserve System as well as the national Small Business Credit Survey (SBCS).

The SBCS asks firms with fewer than 500 employees how much financing their business sought and obtained in the past year. Our FRED graph above shows the share of firms applying for financing that were approved for the full amount they sought. Survey responses are available from 2016 through 2025.

These firms are sorted into three different categories of credit risk: low (solid blue line), medium (dashed green line), and high (dotted orange line).

As you might expect, firms with low credit risk consistently received the full amount of the financing they were seeking more frequently than firms with riskier credit profiles. As Fed Small Business researchers point out, “riskier firms are more often newer and smaller than those with stronger credit scores. As a result, it may be the case that businesses most in need of financing have the most difficulty accessing those funds.”

Small business details 

The SBCS offers rich details about the industry, firm size, geographical location, and demographic characteristics of the owners. These data help tell some compelling stories. For example:

• Small rural firms were consistently more likely to receive the full amount of financing compared with their urban counterparts.
• Small firms with annual revenues above $1 million were more likely to receive the full amount of financing compared with firms with revenue below that threshold.
• Small veteran-owned firms are generally at par with small non-veteran-owned firms regarding their full access to the financing requested. But short-lived gaps between these two groups occasionally appear.

Learn more about the demographics of small business owners.

How this graph was created: Browse FRED by release and select “Small Business Credit Survey” and its “Approved for New Financing” release table. Scroll to the section labeled “Credit risk” and check the boxes next to the series labeled “Low credit risk,” “Medium credit risk,” and “High credit risk.” Scroll to the bottom of the page and click “Add to Graph.” Repeat for the other demographics discussed.

Suggested by Krishna Meegada and Diego Mendez-Carbajo.

The quarterly banking profile of FDIC-insured institutions provides an overview of their aggregate financial condition, including data on bank earnings, loan and deposit activity, and asset quality. According to theses profiles, mortgage-backed securities make up more than half of the total assets held on their balance sheets.

Our FRED graph above shows the makeup of these institutions’ balance sheets between the first quarter of 1984 and the first quarter of 2026. The asset classes are as follows, in descending order of relative shares:

1. Mortgage-backed securities (blue area): bonds backed by pools of home mortgages (60.7%)
2. U.S. Treasury securities (orange area): debt issued by the US federal government (33.5%)
3. State and municipal securities (green area): bonds issued by states and local governments to fund public projects (5.8%)
4. Equity securities (purple area): shares of ownership in a corporation (0.0%)

We can see that mortgage-backed securities consistently represent the lion’s share of assets. However, between 2008 and the time of this writing, the share of those securities has decreased while the share of US Treasury and state and municipal securities has increased. Researchers at the Kansas City Fed point to changes in the regulatory environment and evolving preferences for risk to explain this changing mix.

These assets can also be classified as either trading securities or investment securities. Trading securities are intended to generate short-term financial gains and typically make up a small share of a bank’s total assets. Investment securities, on the other hand, make up the larger share of a bank’s total assets and typically have longer holding periods. Their type is reported on the balance sheet as either “held to maturity” (HTM) or “available for sale” (AFS).

Our second FRED graph below shows the proportions of HTM (blue area) and AFS securities (green area) held in FDIC-insured banks between the first quarter of 1994 and the first quarter of 2025.

Since 1996, most of the investment securities are available for sale, meaning they are held for an indefinite period of time and could be sold before maturity. However, since 2010, the proportion of investment securities that banks intend to hold until expiration, or maturity, has increased. At the time of this writing, they amount to 39.8% of all investment assets.

The Kansas City Fed researchers mentioned above ascribe this changing pattern to a strategy to better protect the value of mandatory capital levels against financial risk.

How these graphs were created: First graph: Browse FRED data by source and navigate to “Federal Deposit Insurance Corporation.” Select the release “FDIC Quarterly Banking Profile” and the release table “Assets and Liabilities of FDIC-Insured Commercial Banks and Savings Institutions.” Scroll to the section labeled “Securities” and check the boxes next to the series labeled “U.S. Treasury Securities,” “Mortgage-Backed Securities,” “State and Municipal Securities,” and “Equity Securities.” Scroll to the bottom of the page and click “Add to Graph.” Click the “Edit Graph” button and select the “Format” tab to choose “Graph Type: Area” and “Stacking: Percent.”
Second graph: Navigate to “Federal Deposit Insurance Corporation” source again to select the same release and release table. Again, scroll to the section labeled “Securities” and check the boxes next to the series labeled “Available for Sale (Fair Value)” and “Held to Maturity (Amortized Cost).” Click “Add to Graph.” Click “Edit Graph” and select “Format” to choose “Graph Type: Area” and “Stacking: Percent.”

Suggested by Joe Kledis, Collin Eldridge, Melanie LeTourneau and Diego Mendez-Carbajo.

The FRED Blog has discussed why employment in retail and postal services peak around the Christmas holidays. Today we tap into a 2018 research piece from the Federal Reserve Bank of Chicago to discuss why construction employment may follow different patterns across states.

Our FRED graph above shows monthly employment data reported by the US Bureau of Labor Statistics. The solid lines are the numbers (in thousands) of employed workers in construction between May 2016 and June 2026 in two states: Kentucky in purple and Minnesota in blue. The dashed lines are the same employment figures adjusted for the seasonal impact of factors, such as weather, that affect overall economic activity in that industry. We picked those two states to make our point because they have markedly different weather during the winter and summer months.

Note there are far more construction employees in Minnesota than in Kentucky because the Northern state is more populous than the Southern / Midwestern state. Given this size difference, comparing annual employment peaks and throughs between states isn’t easy or straightforward.

To better tell the story behind the numbers, we created a second FRED graph that plots the size of the seasonal changes in employment as a fraction of the seasonally adjusted employment figures between May 2016 and June 2026. This graph shows similar overall patterns for both states: increases through August and declines until February, but a much wider seasonal range in Minnesota than in Kentucky. (That is, much higher highs and much lower lows for Minnesota.) This difference could be related to the ability to work through more of the winter months in the South relative to the North.

If you want to dive further into these patterns, check out the state-level employment data by industry in FRED.

How these graphs were created: Search FRED for “All Employees: Construction in Minnesota” and find the seasonally adjusted series (MNCONS). Click “Edit Graph” and navigate to the “Add Line” tab. Search for “All Employees: Construction in Minnesota” and find the non-seasonally adjusted series (MNCONSN) and click “Add Data Series.” Repeat with the seasonally adjusted (KYCONS) and not seasonally adjusted (KYCONSN) series for “All Employees: Construction in Kentucky” to complete the graph.

Suggested by Alison Booth and Diego Mendez-Carbajo.