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Women are more likely than men to start businesses without seeking financing. Female business owners, like their male counterparts, largely depend on personal finances, but they are only half as likely as men to obtain business loans from banks. This may put women-owned businesses at a disadvantage since an early relationship with a bank may be critical for future business financing. Businesses that are equally owned by men and women are more likely to use credit cards, and far more likely to put up personal assets as a source of financing (for instance, home equity).‍‍‍‍‍

Veteran-owned businesses are similar to other businesses in their use of credit for startup and expansion. For example, for firm expansion, 4.5% of veterans used personal credit cards and 4.3% usedbank loans; the comparable figures for all firms were 5% and 4.5%.

Credit cards are used extensively, but they represent only a small portion of total finance. A recent report by the National Small Business Association shows that credit cards were one of the top three sources of short term capital used by small businesses. However, theCensus Bureau finds them to be of lesser importance for startup and expansion capital.

63% of all small employer businesses have some debt.The amount of debt that a business carries varies with size and age. Three-quarters of firms with 50 or more employees carry debt, compared with 60% of firms with fewer than 10 employees. Younger firms tend to carry far less debt than their older counterparts.

Small businesses’ startup capital needs vary, and employer firms tend to use more than non employers.More than 43% of employer firms used over $25,000 in startup capital compared to only 12% of nonemployer firms. A relatively large percentage of both employers and non employer businesses used a small amount of startup financing (less than $5,000), and a sizeable share of both used no startup capital.

Existing businesses use similar financing vehicles as startups to finance expansion. Personal savings are themost common source of expansion finance, followed by reinvestment of business profits. The percentage of firms using expansion capital is much smaller compared with those starting new businesses.

Startups make heavy use of personal equity and traditional debt, with over half using their own personalsavings (Figure 2). Census Bureau data show thatemployers made greater use of financing than didnonemployers, but also continue to rely on personalsavings.Roughly 30% of new nonemployer firms and 7%of employer firms used no startup capital.‍

According to the National Small Business Association,73% of small firms used financing in the last 12 months.Small business financing needs vary greatly. Aboutone-quarter use no financing, and for others, the lack ofcapital causes difficulties growing the business, financing future sales, and keeping adequate inventory.

Small business accounts for a significant amount ofall business borrowing. Bank loans going to smallbusinesses totaled almost $600 billion in 2015. Smallbusinesses also draw from other sources, such asfinance companies, angel capital, and venture capital.While the percentage of these funds that go to smallb usinesses is unknown, the total funding from these sources accounted for $593 billion in 2015 (Figure 1). Additional sources of small business finance include‍ personal savings, personal and business credit cards, online lending platforms, loans from family and friends, and home equity.

Small businesses borrow for four principal reasons: tostart a business, purchase inventory, expand a business, and strengthen the firm’s financial foundation.Firms choose different means of financing dependingon the intended purpose. Small businesses’ financingoptions typically fall into two categories: debt and equity. Other unconventional sources can also play a criticalrole in meeting a firm’s financial needs.

63% of all small employer businesses have some debt.The amount of debt that a business carries varies withsize and age. Three-quarters of firms with 50 or moreemployees carry debt, compared with 60% of firms withfewer than 10 employees. Younger firms tend to carry