Journal of Banking & Finance 22 (1998) 1067±1076

``New'' data sources for research on small

business ®nance
*
John D. Wolken
Board of Governors of the Federal Reserve System, Mail Stop 149, Federal Reserve Board, 20th and
C Sts. NW, Washington, DC 20551, USA

Abstract

This paper describes three new sources of data on small business ®nances: Bank Call
Report data on small business lending, the 1995 Survey of Consumer Finances (SCF),
and the 1993 National Survey of Small Business Finances (NSSBF). Each of these data
sources o€ers publicly available micro-level data useful for examining a wide variety of
issues and questions about small business ®nances. A number of studies which have uti-
lized these data are cited and information on how to access these data is provid-
ed. Ó 1998 Elsevier Science B.V. All rights reserved.

JEL classi®cation: D21; G20; M20

Keywords: Small business ®nance; Small business data; Small business loans

1. Introduction

Until recently, up-to-date and comprehensive data on small business ®nanc-

es have been lacking. Some data have been available in aggregate form, such as
the Internal Revenue Service's Statistics of Income (1994) and the Bureau of
the Census' Characteristics of Small Business Owners (1991). However, data
at the micro level generally have been unavailable to the public, primarily
due to concerns about con®dentiality and privacy.

*
Tel.: 1 202 452 2503; e-mail: jwolken@frb.gov.

0378-4266/98/$19.00 Ó 1998 Elsevier Science B.V. All rights reserved.

PII S 0 3 7 8 - 4 2 6 6 ( 9 8 ) 0 0 0 1 5 - 6
1068 J.D. Wolken / Journal of Banking & Finance 22 (1998) 1067±1076

In the past few years, new sources for studying issues of small business ®-
nance have begun to appear. In this paper, I will describe three important
``new'' sources of publicly available micro-level data which can be used to
study a variety of issues in small business ®nance. These three sources are Call
Report data on small business loans, the Survey of Consumer Finances (SCF),
and the National Survey of Small Business Finances (NSSBF). 1 For each of
these data sources, the discussion includes a brief description of the content,
a summary of important advantages and limitations, and a few citations of re-
search using these data.

2. Bank and thrift Call Report data on small business lending

Since 1993, the Federal Reserve and other regulatory agencies have required
insured depository institutions to report on small business lending in the mid-
year Reports of Condition and Income (Call Report). 2 These data were col-
lected to measure the extent of insured depository institutions' lending to
small businesses. The unit of observation for this data set is a federally insured
depository institution. In 1997, there were about 9000 commercial banks and
about 2000 thrift institutions reporting. Some reporting problems occurred
in the ®rst year (1993), but since 1994 the data have been reliable (see Table 1).
Insured depository institutions report on two types of ``small business''
loans: (l) Commercial and Industrial Loans to US Addresses and (2) Loans Se-
cured by Nonfarm Nonresidential Properties. For each type, depository insti-
tutions report the number and amount outstanding for loans with origination
amounts of less than $100,000, $100,000±$250,000, and $250,000 to less than
$1,000,000. Origination amounts are the maximum of the loan extension, loan
commitment, or total loan value if the extension is part of a loan participation.
(Similar information is also collected for two types of small farm loans.)
Attractive features of the Call Report data set are: (i) it is a census, not a
survey ± all insured depository institutions are required to report these data
on the Call; (ii) it is fairly timely ± data are available within six months; (iii)
panel data can be constructed from each annual cross section to study changes
in depository lending to small businesses over time; and (iv) information about
the characteristics of the depository institutions (available from the Call Re-
port) can be matched with the small loan data. Unfortunately, these data do

1
For a general survey of small business data sources, see Ou (1991). A compilation of statistics
on small businesses from a wide variety of sources is available in the U.S. Small Business
Administration's Handbook of Small Business Data (1994).
2
In 1997, the banking agencies required larger banks to report on small business loan extensions
as part of the new Community Reinvestment Act provisions. These data will be a useful addition to
the small business Call data.
 J.D. Wolken / Journal of Banking & Finance 22 (1998) 1067±1076 1069

Table 1
Thrift and bank small business loan data (schedule RC-C, Part II)
Unit of analysis
Number of observations
Collection frequency
General description
Small business related elements
Reporting lag
Source
Federally insured depository institutions
About 9000 commercial banks and about 2000 savings
institutions in 1997
Annually (since 1993) on June 30th Call Report
Detailed information about an institution's balance sheet, loan
portfolio, deposit portfolio, and income statement
Number and amount of small loans outstanding for ``Com-
mercial and Industrial Loans to US Addresses'' and ``Loans
Secured by Nonfarm Nonresidential Properties'' for three loan
size origination classes: $0±$100,000, $100,000±$250,000 and
$250,000±$1,000,000
About six months
Call Report information can be purchased from the National
Technical Information Service (NTIS). See http://www.ntis.gov
for more information

not include any loan contract information other than loan size nor are data
available on the ®rms to which these loans are made.
These data can be (and have been) used to measure the extent of small busi-
ness lending by depository institutions. To do so, however, requires the as-
sumption that small loans are originated with small ®rms. In some
situations, this assumption may not be tenable. First, not all small loans are
originated with small businesses. The extent of this problem is unknown at this
time. However, as a result of 1997 revisions to the Community Reinvestment
Act, data will be available in 1998 to answer this question. As part of the Com-
munity Reinvestment Act, larger banks will be required to report on the num-
ber and amount of loan extensions made to businesses with fewer than one
million dollars in annual receipts.
Second, depository institutions certainly make loans to small businesses that
are not booked as commercial and industrial loans or nonfarm nonresidential
property loans. Examples include some auto loans and second mortgages on
personal residences when the proceeds are used for business purposes.
Despite the newness of these data, a sizeable body of literature has used
them to examine issues centering around bank consolidation and the e€ect
of bank size on small business lending. Two examples are the papers in this spe-
cial issue by Peek and Rosengren (1998) and Strahan and Weston (1998). Two
other recent studies examining bank mergers and small business lending are
Berger et al. (1998) and Walraven (1997).

3. 1995 Survey of Consumer Finances

The 1995 SCF is the most recent of a series of surveys of US households

conducted about every three years for the Board of Governors. This survey
1070 J.D. Wolken / Journal of Banking & Finance 22 (1998) 1067±1076

collects information from a nationally representative cross-sectional sample of

about 4000 households. The unit of observation is a household. Detailed infor-
mation about household assets, liabilities, pension and retirement plans, use of
®nancial services and suppliers, and demographic characteristics were obtained
(see Table 2).
In particular, the survey contains a section on business ownership and man-
agement, including number of businesses owned, number of businesses in
which the household has an active management role, the type of business,
how and when acquired, number of employees, and percentage of businesses
owned. There are also questions about the relationship between business and
personal assets.
One advantage of this survey is that it is more likely to obtain information
about ``home-based'' and start-up small businesses than are surveys of small
businesses. This is because the sample design of the SCF calls for oversampling
of households with certain wealth characteristics that are likely to be rare in the
general population. These same characteristics are likely to be positively corre-
lated with business ownership. In contrast, the smallest and newest businesses
are typically underrepresented on publicly available business lists from which
business surveys are likely to draw their samples.
Another advantage of the SCF is the depth of data collected on the personal
assets, liabilities, and ®nancial services used by the household. These data can
be combined with business ownership information to study the relationship be-
tween personal and business ®nances for small ®rm owners. Additionally, the
questions about business ownership have remained virtually unchanged since
the 1989 SCF, permitting cross-sectional comparisons over time.

Table 2
1995 Survey of Consumer Finances
Unit of analysis
Number of observations
Collection frequency
General description
Small business related elements
Reporting lag
Source
US household
Over 4000
About every three years
General survey of the components of household wealth,
including assets, liabilities, retirement, demographic charac-
teristics, employment, pensions, and use of ®nancial services
and suppliers
Information on active management and ownership of busi-
nesses, including numbers of employees, family members
working in business, percentage of businesses owned, rela-
tionship between business and personal assets, organizational
form and business type
About two years (but declining)
http://www.bog.frb.fed.us/pubs/oss/oss2/sc®ndex.html. This
site contains links to the 1995, 1992, and 1989 SCF surveys,
codebooks, related documentation, and technical papers on
survey methodology
 J.D. Wolken / Journal of Banking & Finance 22 (1998) 1067±1076 1071

Table 3
1993 National Survey of Small Business Finances
Unit of analysis US small business ± de®ned as for pro®t, non®nancial,
nonfarm business enterprise with fewer than 500 full-time
equivalent employees and in operation as of year-end 1992
Number of observations Over 4600
Collection frequency About every ®ve years
General description Second survey of a nationally representative sample of small
businesses conducted by Board of Governors and Small
Business Administration. The purpose of the 1993 survey was
to collect information on small business credit availability, but
designed to provide general research database on small
business ®nances
Small business related elements Firm and owner demographics, an inventory of ®nancial
service and supplier use, characteristics of ®nancial institutions,
most recent loan experience, trade credit, equity injections, and
a balance sheet and income statement
Reporting lag About three years (but declining)
Source http://www.bog.frb.fed.us/pubs/oss/oss3/nssbf93home.html.
This site contains links to survey data, codebook, methodology
report and some research reports. The 1987 data will be added
in the near future

To date, I am aware of only one study which has attempted to use these data
to study small business ®nancing questions. In this issue, Avery et al. (1998)
examine the role of personal wealth in ®nancing small businesses. Their study
uses data from both the SCF and the NSSBF, which is described next.

4. 1993 National Survey of Small Business Finances

The 1993 NSSBF is the second survey of small business enterprises co-spon-
sored by the Board of Governors and the US Small Business Administration. 3
The survey collected data for 1993 through interviews conducted with business
owners in 1994 and early 1995. The unit of observation was a small business
enterprise. A cross-sectional sample of 4637 business enterprises were selected
to provide a representative sample of all nonfarm, for pro®t, non®nancial small
business enterprises in the United States. These ®rms represent about 5 million
businesses (see Table 3).
For the purposes of this survey, small businesses were de®ned as enterprises
with fewer than 500 full-time equivalent employees that were for pro®t, non®-

3
The ®rst NSSBF collected data for ®rms operating during 1987. Many of the questions used in
the earlier survey were repeated in the 1993 survey. However, changes in the lists of businesses from
which the samples were drawn changed between 1987 and 1993. This makes direct comparisons
between the 1987 and 1993 data problematic. For such a comparison, see Cole et al. (1996).
1072 J.D. Wolken / Journal of Banking & Finance 22 (1998) 1067±1076

nancial, nonfarm business enterprises and in operation as of year-end 1992.

Full-time equivalents were de®ned as full-time employees plus one half of
part-time employees. Although a 500 employee ®rm may actually be quite
large, using such a broad de®nition facilitates comparisons between truly small
businesses and ``medium'' sized businesses.
The survey solicited information about the characteristics of the ®rm and its
primary owner (for example, ®rm and owner age, industry, and type of busi-
ness organization), the ®rm's income statement and balance sheet, and details
of the use and sources of ®nancial services. The survey also obtained informa-
tion about the ®rm's most recent borrowing experience, the use of trade credit,
and capital infusions. Most data apply to 1993. Balance sheet and income data
are for ®scal year-end 1992.
The 1993 NSSBF is the most comprehensive source of data available on
small businesses' use of ®nancial services and ®nancial suppliers. 4 One unique
feature of this data set is that individual ®nancial service suppliers (and their
characteristics) can be linked to speci®c ®nancial products used by small busi-
nesses. This feature was used by Kwast et al. (1997) to examine the extent to
which businesses (and households) ``cluster'' their purchases of ®nancial servic-
es at local ®nancial institutions. Elliehausen and Wolken (1992) examined the
clustering issue for small businesses using the 1987 NSSBF.
Petersen and Rajan (1994), and Berger and Udell (1995) are examples of
studies that used the 1987 NSSBF to examine the importance of lending rela-
tionships in small business lending. In this issue, Cole (1998) examines relation-
ship lending using the 1993 NSSBF. Cole et al. (1996) used both the 1987 and
1993 NSSBFs to determine whether the competition to banks from nonbanks
increased over the 1987±1993 period. And as mentioned earlier, Avery et al.
(1998) combined data from the SCF and the NSSBF to study the role of per-
sonal wealth in small business ®nance.
Issues other than small business lending have also been examined using the
NSSBFs. For example, Cole and Mehran (1997) studied the determinants of
executive compensation in small businesses. And Ang (1992) used data from
the 1987 NSSBF to evaluate a proposed theory of ®nance for privately held
®rms.

5. Other sources

There are several other sources which provide important information about
small ®rms, but whose micro-level data generally are unavailable to the public.

4
For general statistics on the use of ®nancial services by small businesses, see Cole and Wolken
(1995).
 J.D. Wolken / Journal of Banking & Finance 22 (1998) 1067±1076 1073

Data on loan contract terms for small business loans are rare. One source
which has been used to make inferences about small business loan terms is
the Federal Reserve's Survey of Terms of Bank Lending for Businesses
(STBL). This survey collects loan contract terms for all loan extensions during
one week each quarter from a sample of about 300 commercial banks (Ta-
ble 4). For each commercial and industrial loan extension, the survey collects
the loan amount, interest rate, maturity, commitment, whether the loan is part
of a participation or is callable, repricing, and purpose of loan. The data are
timely, typically available within about six weeks of the reporting period. These
data have the same limitations as do the small business loan data on the bank
call report. In particular, size of loan must be used as a proxy for size of busi-
ness and no data on the characteristics of the business are collected.
Balance sheet and income statement data for small businesses are often dif-
®cult to obtain. Most small businesses do not have audited ®nancial statements
and many do not prepare balance sheets or income statements. However, rep-
resentative ®nancial statements can be obtained from the Internal Revenue Ser-
vice's Statistics of Income Source Book (Table 5). About three years following
a tax year, the IRS publishes detailed income statement items for sole propri-
etorships, corporations, and partnerships. Balance sheet items are published
for corporations and partnerships. The data are compiled annually from a
large sample of tax return data ®led by businesses. Within these publications
are tabulations for di€erent industries, asset and sales size groups, and organi-
zational forms.
Information on business ownership characteristics, such as race and gender
are generally unavailable, publicly or privately. Every ®ve years, the Census
Bureau conducts economic censuses. One of these surveys is the Characteristics
of Business Owners (CBO) survey (Table 6). The data are collected through a
statistically selected sample mail survey of about 100,000 business owners using

Table 4
Federal Reserve's Survey of Terms of Bank Lending to Businesses
Unit of analysis
Number of observations
Collection frequency
General description
Small business related elements
Reporting lag
Source
Individual bank loan extension
More than 30,000 loans per quarter
Quarterly for one or more days of the ®rst week of the second
month of the quarter
Detailed information on contract terms of all domestic
commercial and industrial loans originated during survey
period
Data on loan or commitment size, interest rate, loan amount,
whether collateral was pledged, whether issued under com-
mitment, purpose of loan, months to maturity
About six weeks
Statistical Release E2; also published in Federal Reserve
Bulletin in February, May, August, and November
1074 J.D. Wolken / Journal of Banking & Finance 22 (1998) 1067±1076

Table 5
Internal Revenue's statistics of income
Unit of analysis Business or individual tax return
Collection frequency Annually
General description Detailed list of balance sheet and income statement items as
compiled from tax returns. No balance sheet data for sole
proprietorships
Small business related elements Published data are reported separately for several receipt,
asset, and industry categories, for di€erent types of corpo-
rations, partnerships, and sole proprietorships
Reporting lag About three years for published Source Book. Some data is
available earlier via electronic media
Source Corporate Source Book of Statistics of Income (Washington,
DC: Internal Revenue Service) and SOI Bulletin (Washing-
ton, DC: Government Printing Oce). Internet site: http://
www.irs.ustreas.gov/prod/tax_stats

administrative records. The 1987 CBO provides data about the characteristics
of minority and women-owned businesses and their owners as well as a com-
parable nonminority, male-owned business universe. Also included in the
CBO are questions on owner age, marital status, birthplace, educational back-
ground, work experience of owner, household income of owner, and starting
capital requirements. Data from the 1992 CBO should be available soon.

6. Summary

This paper has described three ``new'' publicly available sources of data that
are useful for studying issues in small business ®nance. In addition, the paper
brie¯y describes three data sets that are somewhat less accessible, but neverthe-
less provide useful information about the characteristics of small businesses
and their loans. The studies referenced in this paper which have used one or

Table 6
Bureau of the Census' Characteristics of Business Owners survey
Unit of analysis Owners of sole proprietorships, small partnerships, and
Subchapter S corporations (less than 10 owners)
Number of observations About 100,000 business owners
Collection frequency Every ®ve years ending in 2 and 7
Small business related elements Owners attributes, attributes of business startups, business
income and employment, sources and amount of startup
capital
Reporting lag About ®ve years. (Data for 1992 survey should be available
soon.)
Source 1987 Characteristics of Business Owners (Washington, DC:
Government Printing Oce, November 1991)
 J.D. Wolken / Journal of Banking & Finance 22 (1998) 1067±1076 1075

more of these sources are testimony to the interest in small business ®nance.
Even though the data have been available for only a short time, they have al-
ready proven valuable in gaining a better understanding of small business ®-
nances and in formulating public policy a€ecting small businesses.

Acknowledgements

The opinions expressed do not necessarily re¯ect those of the Board of Go-
vernors or its sta€. The author thanks Nicole Meleney for excellent research
assistance.

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