2. GEOGRAPHY The NYC sample mirrors small business density by borough.

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1 ABOUT THE FRBNY SMALL BUSINESS FINANCES POLL AND SAMPLE In June and July 2010, the New York Fed s Office of Community Affairs polled 426 small business owners on their recent business performance, business financing choices, and borrowing experiences. The poll was conducted online and distributed through a network of civic and business partners. To view the poll questions, visit 1. AGE About half of the sample firms are 10 years or younger, while half are older. 3. SIZE 70% employ fewer than 5 payroll employees, similar to the US small business population. 2. GEOGRAPHY The NYC sample mirrors small business density by borough. 49% 35% 18% 25% 22% Small Business Respondents by State 23% 16% 3% Respondent Firm Age, Years n=380 Pennsylvania Unknown 13% Number Payroll Employees Per of Firm n= INDUSTRY Construction and retail are a larger share of the sample than their composition of local industry. Transportation Arts and Entertainment Leisure and Hospitality Health Manufacturing Technology Retail Professional and Business Services Construction Other * 2.7% 3.2% 3.4% 3.7% 4.5% 6.4% 10.9% 19.9% 25.7% 19.6% Connecticut 0.5% New Jersey 3% Respondents, by Industry Staten Island 9% Queens 16% *Other: includes industries comprising less than 3% of the sample, including Education, Finance, Personal Services, Information, and Wholesale. n=377 Bronx 8% Brooklyn 23% New York 73% Manhattan 44% NYC Respondents, by Borough n= SALES GROWTH Over 60% saw their sales/revenue decline during and immediately after the recession. 49% Significantly decreased Respondents by Change in Sales/Revenue (Spring 2008 to Spring 2010) 17% Moderately decreased 9% No change 19% Moderately increased 7% Significantly increased n=329

2 In June and July 2010, the New York Fed s Office of Community Affairs polled 426 small business owners on their recent business performance, business financing choices, and borrowing experiences. The poll was conducted online and distributed through a network of civic and business partners. Please see for the full report and survey. 1. Are you a small business or self-employed? 2. Which organization sent you the poll? 7. How many employees do you currently employ? FIRM PROFILE 3. Business name 4. Business zip 5. Please select the industry that best matches your firm s products/services: Arts and Entertainment Manufacturing Construction Wholesale Education Professional and Business Services Finance Retail Personal Services Technology Health Transportation Information Other 6. In what year was your business established/purchased/acquired? 8. How many full-total employees (excluding yourself) did you employ 2 years ago? 9. During the last 2 years, how would you describe your business sales/revenues? Significantly increase Moderately increase 10. During the next 3 months, do you expect your sales/revenue to? No change Moderately decrease.significantly decrease 11. During the next 3 months, do you expect your number of employees to? Past Borrowing Present Borrowing Future Borrowing FIRM FINANCES 12. Which of the following are currently the most important types of financing for your business? Types of Financing (select 3) Business earnings Commercial bank loan or line of credit Loans from family/friends Home equity line Credit cards SBA/Government-guaranteed loan Nonprofit lender Payday lender Tax refund anticipation loan Trade credit Capital contribution from family/friends Gov't grants Private equity Other 13. Two years ago, which of the following were the most important types of financing for your business? Same as above 14. During the last 6 months, did you attempt to borrow for business purposes? QUESTIONS FOR BORROWERS 15. During the last 6 months, did you apply for the following types of credit and were you approved? Financing for a vehicle or equipment New line of credit Extension of existing line of credit Business loan New small business credit card New personal business card for use in this business Change in limit on existing credit card Applied? 16. During the last 6 months, has your business been able to get all of the credit needed? Approved? 17. Select the reason(s) why you attempted to borrow: Finance order(s) Purchase equipment Start a business Expand business Pay employees Hire temporary workers Finance a previous loan/debt Pay off outstanding debts Bridge the gap between payables and receivables 18. Do you plan to apply for credit in the next 6 months? 19. Are you planning to pay down existing debt in the next 6 months? 20. In general, how much does credit availability affect your decisions to? Increase inventories Purchase equipment Invest in technology or services Hire or re-hire employees Refinance/pay down debt Diversity business operations

3 ACKNOWLEDGEMENTS The Community Affairs Office thanks the local government and nonprofit organizations that distributed the poll to their members. Accion USA Ben Franklin Technology Partners of Pennsylvania The Bronx Overall Economic Development Corporation The Brooklyn Chamber of Commerce The Business Council of New York State Community Development Corporation of Long Island Community First Fund Cooperative Business Assistance Corporation The Entrepreneurs Forum of Greater Philadelphia The Manhattan Chamber of Commerce New Jersey Economic Development Authority New York Business Development Corporation The New York City Council The New York City Department of Consumer Affairs The New York State Small Business Development Centers Queens Economic Development Corporation The Staten Island Chamber of Commerce The Staten Island Economic Development Corporation Working Today Freelancers Union

4 CREDIT APPLICATIONS AND SUCCESS RATES The poll found evidence of comparatively strong credit demand. Of the 59 percent of respondents that applied for credit, about half were successful obtaining at least one credit product and thereby met at least some of their credit needs. Did not Apply 28.9% (n=123) Applied 59.4% (n=253) Unsuccessful 22.3% (n=95) Successful 29.6% (n=126) N/A 11.7% (n=50) N/A 7.5% (n=32) N=426

5 CREDIT APPLICATIONS AND OUTCOMES The most frequently requested credit product was a business line of credit, yet it had a denial rate of 63 percent. With the exception of vehicle or equipment financing, which had the highest approval rate of 63%, products that require collateral pledges seem harder for applicants to obtain in an environment of depressed asset and real estate values. Approved Declined No Response New personal credit card for use in business 46% 44% Change in limit on existing credit card 29% 60% Business loan 20% 69% Financing for a vehicle or equipment 63% 30% 7% Extension of existing business line of credit 33% 57% New small business credit card 38% 51% New business line of credit 27% 63% Number of Respondents

6 Number of firms SMALL BUSINESS FINANCES POLL KEYS TO SUCCESS AND CREDIT APPROVAL* Successful applicants tended to be firms that had generated positive sales/revenue growth, firms that were sufficiently successful two years ago to be able to self-fund their needs through retained earnings, and firms that were at least five years old. 140 Denied Approved Revenue Growth Retained Business Earnings Financing (2008) Age ( >5 years) N=54 N=120 N=140 *Success in obtaining at least 1 credit product.