The Federal Reserve Bank’s Small Business Credit Survey shows that 15% of all small businesses with employees are in rural areas. Though rural small businesses make up a small portion of all small businesses, they operate 84.8% of all establishments in rural counties according to a new report from the SBA Office of Advocacy. Rural small businesses also account for 54.3% of employment in rural areas. Small businesses in rural areas have an average of 8.5 employees.
In contrast, small businesses make up 82.5% of all establishments in metropolitan areas. Small businesses account for 45.5% of employment in metropolitan areas, and metropolitan small businesses employ an average of 9.5 people.
Even though small businesses employ a majority of workers in rural areas, rural employment by small businesses has grown slowly compared to total employment. Between 2012 and 2019, small business employment only grew by 1%. This only amounted to rural small business employees growing from 7.5 million to 7.6 million people during the given period.
For big businesses, rural employment increased by 12.9%. Metropolitan employment by small businesses grew by 11.4%, and metropolitan employment by big businesses grew by nearly 20%. Because of the faster growth rate, large businesses caused the share of rural employment by small businesses to decrease from 57.2% in 2012 to 54.3% in 2019.
SBA lenders have helped get nearly $4.72 billion out to rural small businesses in fiscal year 2023. SBA data shows that rural small businesses received 8,494 7(a) loans and almost $3.88 billion. Under the 504 loan program, rural small businesses received 938 loans worth $840.65 million in fiscal year 2023.
Sources:
Small Business Credit Survey, Federal Reserve Banks
About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the Federal Government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
