Finding customers is the No. 1 challenge faced by small- and medium-sized businesses in New York State, not taxes, according to a survey released Thursday.
Only 4 percent of companies with fewer than 500 employees ranked taxes as their top challenge in the first half of 2014, the Federal Reserve Bank of New York reported. Ninety-nine percent of all firms in the state are that size, according to census data.
Of the 656 businesses surveyed last fall by the New York Fed, a quarter said attracting customers was their biggest challenge. Nineteen percent listed uneven cash flow and 15 percent cited credit availability.
The responses were included in a credit survey by four Federal Reserve banks. The survey is conducted twice a year and helps to inform the nation's central bank about business financing.
Asked about the low priority that taxes received, Gary Hughes, a spokesman for the Business Council of New York State, Thursday pointed to the survey results showing that complying with government regulations is a much larger concern for New York businesses than for those in Georgia, Ohio and Pennsylvania.
He also said hiring and retaining talented workers remains a problem for the council's more than 2,300 member businesses.
In the New York Fed survey, a quarter of the companies sought a bank loan, credit line, credit card or other type of financing from January through June in 2014. And 60 percent received some type of financing.
Ninety percent of the businesses asked for less than $250,000, and more than half reported having no outstanding debt.
Five in 10 of the businesses said they were losing money. But that number was skewed, New York Fed officials said, by responses from young firms that typically have red ink as they invest back into operations and try to garner enough customers to sustain themselves.
"It takes a while for firms to become profitable," said Claire Kramer, the bank's assistant vice president for outreach and education. "Many of the small businesses in New York are young, less than five years old."
She also said the companies applying for loans and getting them were generally older and profitable.