--- url: 'https://lonelyentrepreneur.com/founder-the-owners-own-money/' title: 'When Money Got Tight, 58% of Owners With 1 to 4 Employees Used Their Own Funds. At 20 to 49, the Business’s Reserves Came First.' author: name: Samantha Lankford url: 'https://lonelyentrepreneur.com/author/sam/' date: '2026-10-17T15:30:00-04:00' modified: '2026-10-17T15:30:00-04:00' type: post summary: 'Fed survey data: at the smallest firms, the owner''s own money was the most common answer to a cash squeeze. From 20 employees up, cash reserves came first.' categories: - Blog Post image: 'https://lonelyentrepreneur.com/wp-content/uploads/2026/10/founder-the-owners-own-money-hero.webp' published: true --- # When Money Got Tight, 58% of Owners With 1 to 4 Employees Used Their Own Funds. At 20 to 49, the Business’s Reserves Came First. ![The Lonely Entrepreneur](https://lonelyentrepreneur.com/wp-content/uploads/2024/01/TLE_Logo_mobile-490W-26-26.png)Founder Data Report ![When Money Got Tight, 58% of Owners With 1 to 4 Employees Used Their Own Funds. At 20 to 49, the Business’s Reserves Came First.](https://lonelyentrepreneur.com/wp-content/uploads/2026/10/founder-the-owners-own-money-hero.webp) Founder Data Report # When Money Got Tight, 58% of Owners With 1 to 4 Employees Used Their Own Funds. At 20 to 49, the Business’s Reserves Came First. By Michael Dermer • Updated October 17, 2026 Get clarity — download the free Entrepreneur Survival Guide Summary. [Download the Survival Guide →](https://lonelyentrepreneur.com/esg-overview/?utm_source=blog-cta) Federal Reserve survey data, 2025: when a small business hit a money problem, the most common fix was the owner’s own money. Bigger and older firms reached for the business’s reserves first. Quick Answer In the Federal Reserve’s 2025 Small Business Credit Survey, **54%** of employer firms that had a financial challenge in the prior 12 months dealt with it by **using the owner’s personal funds**, the most common response of all. At firms with **1 to 4 employees** it was **58%**, ahead of using the business’s cash reserves (47%). At **20 to 49 employees** the order flipped: 52% used cash reserves and 41% used personal funds. At 50 to 499, personal funds fell to 27%. The 30-second version - 94% of employer firms reported at least one financial challenge in the prior 12 months. - Among them, the most common response was the owner’s own money: 54%, clear of every other option. - Under 10 employees, personal funds came first; at 10–19 the two were about even; from 20 up, the business’s cash reserves came first. - Firms 0–2 years old: 67% used personal funds. Firms 21+ years old: 39%. - Firms rated medium or high credit risk used personal funds far more often (76% and 78%) than low-risk firms (50%). ## The first place the money comes from Every year the Federal Reserve Banks ask several thousand employer firms what went wrong with their money and what they did about it. In the 2025 survey, 94% reported at least one financial challenge, from rising costs to uneven cash flow. Firms could name every response that applied, so the shares add up to more than 100. At firms with one to four employees, 58% used the owner’s personal funds, 47% used cash reserves, 47% cut costs, 45% raised prices and 35% took on debt. Only 5% did nothing. Run the same question up the size ladder and, from 20 employees on, the owner’s wallet falls behind the business’s cash reserves. The Data Firms with a financial challenge that used personal funds vs. cash reserves, by number of employees 1–4 employees Used personal funds58% (95% range 55–61%) Used cash reserves47% (95% range 44–50%) 5–9 employees Used personal funds55% (95% range 51–59%) Used cash reserves46% (95% range 41–51%) 10–19 employees Used personal funds51% (95% range 46–56%) Used cash reserves50% (95% range 45–55%) 20–49 employees Used personal funds41% (95% range 37–45%) Used cash reserves52% (95% range 47–57%) 50–499 employees Used personal funds27% (95% range 21–34%) Used cash reserves44% (95% range 38–51%) Base: employer firms that reported at least one financial challenge in the prior 12 months. Multiple responses allowed. Bars drawn on a 0 to 80% scale; 95% ranges as published. Federal Reserve Banks, Small Business Credit Survey, 2026 Report on Employer Firms and its data appendix (sbcs-employer-firms-appendix-2025.xlsx). Survey fielded September 3 to November 14, 2025; employer firms with 1–499 employees. Retrieved from fedsmallbusiness.org on October 10, 2026. > At the smallest firms the reserve fund has a name, and it is the owner’s. ## Age moves it the same way Cut by the age of the business, the pattern runs the same direction. At firms up to two years old, 67% of those with a money problem used personal funds and 43% used reserves. At three to five years it was 65% against 48%. From six to 20 years old the two are about even, inside the survey’s margins. At firms 21 years and older, reserves came first: 45% against 39% for personal funds. An earlier piece here found that the firms with one to four employees were less often satisfied with big banks than larger firms. At those same firms, the owner’s money came ahead of the business’s reserves. The Data Firms with a financial challenge that used personal funds vs. cash reserves, by age of firm Firms 0–2 years old Used personal funds67% (95% range 60–73%) Used cash reserves43% (95% range 37–50%) Firms 3–5 years old Used personal funds65% (95% range 59–71%) Used cash reserves48% (95% range 40–57%) Firms 6–10 years old Used personal funds54% (95% range 51–58%) Used cash reserves54% (95% range 48–60%) Firms 11–15 years old Used personal funds53% (95% range 47–58%) Used cash reserves49% (95% range 44–54%) Firms 16–20 years old Used personal funds46% (95% range 41–51%) Used cash reserves48% (95% range 45–52%) Firms 21+ years old Used personal funds39% (95% range 37–41%) Used cash reserves45% (95% range 42–48%) Base: employer firms that reported at least one financial challenge in the prior 12 months. Multiple responses allowed. Bars drawn on a 0 to 80% scale; 95% ranges as published. Federal Reserve Banks, Small Business Credit Survey, 2026 Report on Employer Firms and its data appendix (sbcs-employer-firms-appendix-2025.xlsx). Survey fielded September 3 to November 14, 2025; employer firms with 1–499 employees. Retrieved from fedsmallbusiness.org on October 10, 2026. ## Where personal money goes with a weaker position The survey also sorts firms by credit risk. Among firms rated **low** risk, 50% of those with a money problem used personal funds. Among **medium**-risk firms it was 76%, and among **high**-risk firms 78%. The same firms were far more likely to pay a bill late or not at all: 17% of low-risk firms against 44% and 59%. Personal money is not only the small firm’s first step. It sits alongside the other signs that a business is short. The Data Firms with a financial challenge that used personal funds, by credit risk Low credit risk95% range 47–52% · late or missedpayment 17%50%Medium credit risk95% range 72–80% · late or missedpayment 44%76%High credit risk95% range 67–86% · late or missedpayment 59%78% Base: employer firms that reported at least one financial challenge in the prior 12 months. Drawn on a 0 to 100% scale. Low-risk row faded. Medium and high are level within their 95% ranges. Federal Reserve Banks, Small Business Credit Survey, 2026 Report on Employer Firms and its data appendix (sbcs-employer-firms-appendix-2025.xlsx). Survey fielded September 3 to November 14, 2025; employer firms with 1–499 employees. Retrieved from fedsmallbusiness.org on October 10, 2026. ## What to take from this if you are the backstop If your business has fewer than ten employees or is under six years old and you have covered a gap from your own account, you are in the majority, not the exception. The problem is what it does to the line between you and the business. Money that moves in without a record blurs that line, and the business never has to learn to carry its own lean months. Three moves help. Write down every transfer as a loan or as capital, with a date, so you know the real number. Set a ceiling before the next squeeze, not during it. And treat building a cash reserve as the business’s job. In this survey, the bigger and older firms reached for theirs before the owner’s. Four limits worth holding. The survey is a **convenience sample**, not a random one; the Federal Reserve weights it to match the population of employer firms with 1–499 employees. Firms could pick **several responses**, so the shares overlap and never sum to 100. The comparisons here are made only where the published **95% ranges do not overlap**; where they do, this piece says the groups are about even. And the survey records **what** owners did, not how much money moved or **why** they chose it. The Data Where the numbers land 54% of employer firms with a financial challenge used the owner’s personal funds 58% at firms with 1–4 employees; 27% at 50–499 67% at firms up to two years old; 39% at 21 years and older 78% at firms rated high credit risk; 50% at low risk Federal Reserve Banks, Small Business Credit Survey, 2026 Report on Employer Firms. ## Frequently Asked Questions How often do small business owners use their own money to cover a shortfall? In the Federal Reserve's 2025 Small Business Credit Survey, 54% of employer firms that had a financial challenge used the owner's personal funds, the most common response. At firms with one to four employees it was 58%. Do bigger businesses use the owner's money less? Yes. Personal funds fell to 41% at 20–49 employees and 27% at 50–499, where using the business's cash reserves was more common. Does the age of the business matter? Yes. 67% of firms up to two years old used personal funds, against 39% of firms 21 years and older. What else do firms do when money gets tight? Among firms with one to four employees: 47% used cash reserves, 47% cut costs, 45% raised prices and 35% took on debt. Firms could give more than one answer. Where does the data come from? The Federal Reserve Banks' Small Business Credit Survey, 2026 Report on Employer Firms and its data appendix. The survey was fielded in late 2025 among employer firms with 1–499 employees. Keep reading - [At Big Banks, 85% of Approved Firms With 50 to 499 Employees Were Satisfied. With 1 to 4 Employees, 56%.](https://lonelyentrepreneur.com/founder-who-the-bank-satisfies/) - [Under 10 Employees, the Top Problem Is Customers. From 20 Up, It Is Finding and Keeping Staff.](https://lonelyentrepreneur.com/founder-the-problem-that-changes/) - [Six in Ten American Employer Businesses Have Exactly One Owner. The Average One Has Eight Employees.](https://lonelyentrepreneur.com/founder-the-only-owner/) Part of the entrepreneurial struggle: [Leadership Burden](https://lonelyentrepreneur.com/entrepreneur-struggle/leadership/) ![The Lonely Entrepreneur](https://lonelyentrepreneur.com/wp-content/uploads/2024/01/TLE_Logo_mobile-490W-26-26.png) Published by **The Lonely Entrepreneur** — the community and coaching platform for entrepreneurs who are building alone. [lonelyentrepreneur.com](https://lonelyentrepreneur.com/) This article is for educational purposes and is not a substitute for professional financial or legal advice.