Search Results
Working Paper
Surveying the aftermath of the storm: changes in family finances from 2007 to 2009
In 2009, the Federal Reserve Board implemented a survey of families that participated in the 2007 Survey of Consumer Finances (SCF) to gain detailed information on the effects of the recent recession on all types of households. Using data from the 2007-09 SCF panel, we highlight the variation in households' financial experiences by examining the distribution of changes in families' balance sheets. Further, we use information on changes in families' saving, investing, and spending behavior to consider the potential longer-term consequences of the current recession on households' finances and ...
Working Paper
Peer-to-peer lending to small businesses
The current paper examines loan-level data from Lending Club to look at peer-to-peer borrowing by small businesses. We begin by looking at characteristics of loan applications that were and were not funded and then take a more in-depth look at funded applications. Summary statistics show an increasing number of small business loan applications over time. Beginning in 2010--when consistent measures of loan purpose were recorded for all applications--loan applications for small businesses were on average less likely than loans for other purposes to have been funded. However, logistic regression ...
Working Paper
Examining the impact of credit access on small firm survivability
This paper examines the effects of credit availability on small firm survivability over the period 2004 to 2008 for non-publicly traded small enterprises. Using data from the 2003 Survey of Small Business Finances, we develop failure prediction models for a sample of small firms that were confirmed to have been in business as of December 2003, with particular attention to the impact of credit constraints. We find that credit constrained firms were significantly more likely to go out of business than non constrained firms. Moreover, credit constraint and credit access variables appear to be ...
Working Paper
Starting small and ending big -- the effect of monetary incentives on response rates in the 2003 Survey of Small Business Finances: an observational experiment
In 2003, the Survey of Small Business Finances (SSBF), conducted by the Federal Reserve Board, implemented the use of incentives to increase response rates. This study examines the effects of some of the characteristics of the implementation - such as level of effort, time in queue, and consecutively-increasing incentive amounts - on unit response. Our estimates suggest that as the number of days increase between the initial screener and main interview, the probability of completion decreases. Similarly, as the number of days increases between each consecutive incentive offer the probability ...
Working Paper
Business to Business Credit to Small Firms
Following the financial crisis, total outstanding loans to businesses by commercial banks dropped off substantially. Large loans outstanding began to rebound by the third quarter of 2010 and essentially returned to their previous growth trajectory while small loans outstanding continued to decline. Anecdotal evidence suggests that firms used trade credit to smooth over cash flow problems. The current paper looks at recent trends in trade credit use by small businesses based on a recent poll done by the Credit Research Foundation. The results highlight the importance of business to business ...
Working Paper
Marketplace Lending and Consumer Credit Outcomes : Evidence from Prosper
In 2005, Prosper launched the first peer-to-peer lending website in the US, allowing for consumers to apply for and receive loans entirely online. To understand the effect of this new credit source, we match application-level data from Prosper to credit bureau data. Post application, borrowers' credit scores increase and their credit card utilization rates fall relative to non-borrowers in the short run. In the longer run, total debt levels for borrowers are higher that of non-borrowers. Differences in mortgage debt are particularly large and increasing over time. Despite increased debt ...
Discussion Paper
Economic Restrictions during the COVID-19 Pandemic and Measures of Small Business Health
Over the course of the COVID-19 pandemic, state and local governments have instituted a wide array of restrictions on activity, easing or tightening these restrictions as concerns about transmission evolved. The particular choices that governments made could have large impacts on both public health and on economic prosperity. In this note, we provide evidence on the correlation between the level of these restrictions and a key component of the vitality of local economies, namely small businesses. We find that, in states with tighter restrictions, a greater proportion of small businesses ...
Working Paper
The use of alternative employment arrangements by small businesses: evidence from the 2003 Survey of Small Business Finances
According to the CPS, employees in alternative work arrangements make up over 10 percent of U.S. workers. Because of the pervasiveness of these types of arrangements, it is important to understand why firms are choosing to use them. Using data from the 2003 Survey of Small Business Finances, we model the firm's decision to use alternative employment arrangements using a large representative sample of small businesses in the U.S. In general, our results are similar to previous establishment-level studies that have examined the use of these types of employment arrangements. However, many of ...
Working Paper
Alternative methods of unit nonresponse weighting adjustments: an application from the 2003 Survey of Small Business Finances
The 2003 Survey of Small Business Finances (SSBF) screening interview had significant unit nonresponse and therefore some type of nonresponse adjustment was deemed necessary. The approach used in the 2003 survey differed from that used in previous surveys. The current paper examines the impact of this technique on weights, point estimates and variance of the estimates by comparing the approach ultimately implemented for the 2003 survey to alternative approaches. The results using the 2003 SSBF hybrid method are very similar to the traditional weighting class method and the propensity ...
Journal Article
Changes in U.S. family finances from 2004 to 2007: evidence from the Survey of Consumer Finances
The Federal Reserve Board's Survey of Consumer Finances for 2007 provides insights into changes in family income and net worth since the 2004 survey. The survey shows that, over the 2004-07 period, the median value of real (inflation-adjusted) family income before taxes was little changed, while mean income climbed 8.5 percent. Unlike family income over this period, both median and mean net worth increased; the median rose 17.7 percent, and the mean rose 13.0 percent. This article reviews these and other changes in the financial condition of U.S. families, including developments in assets, ...