On January 3, the CFPB published a data spotlight entitled “The Financial Security of Small Business Owners: Evidence from the Making Ends Meet Survey.” The report summarizes the personal financial circumstances of small business owners, as derived from the Bureau’s Making Ends Meet survey, and highlights that small business owners experience more personal income volatility than individuals who do not own a business. For example, small business owners are nearly twice as likely than non-owners to report monthly income variations and over 20 percentage points more likely to have experienced a drop in income. In addition, small business owners are more likely to experience unexpected expenses, credit card late fees, and frequent overdraft or insufficient funds fees, despite generally having higher income, savings, and household wealth than non-owners and being more likely to save for retirement, have investments in stocks, bonds, or mutual funds, and own a home.

The report also highlights racial and ethnic group disparities in income volatility. In addition, it notes that small business owners appear to encounter unique credit constraints, as they are more likely to be turned down for credit or receive less credit than requested, even though they apply for credit at similar rates as non-owners.