SMB trends: Future growth optimism persists amid inflation

Small businesses continue to display remarkable resilience despite economic pressures, according to the latest Small Business Cash Flow Trend Report released by Ocrolus and OnDeck. The Q2 2025 report, which surveyed 410 small businesses and analyzed cash flow data from over 2.9 million small business financing applicants, reveals a complex picture of optimism tempered by practical concerns.

Small business confidence remains high

The data shows small business optimism holding steady, with 92% of owners anticipating moderate to significant growth over the next 12 months. This confidence level has remained consistent throughout 2024 and into early 2025, suggesting a durable foundation of small business resilience despite economic fluctuations.

Notably, newer ventures display even stronger confidence in their growth trajectories. Among businesses operating for five years or less, a remarkable 98% expressed optimism about their future growth prospects. This suggests that entrepreneurial spirit remains robust even as established businesses navigate more complex operational challenges.

The sustained confidence among small business owners reflects their adaptability in the face of changing economic conditions. Small business trends for 2025 continue to show remarkable stability in growth outlook despite external pressures. For lenders serving this market, implementing AI-powered SMB lending automation helps streamline decisioning, reduce manual review and better support small businesses pursuing growth.

Inflation and cash flow management are primary challenges

While confidence remains high, small business owners aren’t without concerns. Inflation continues to top the list of challenges, with 48% of respondents identifying it as their primary concern in Q2. This persistent worry reflects the ongoing impact of price increases on operational costs and profit margins.

Cash flow uncertainty has emerged as an increasingly prominent issue, with 72% of small businesses ranking it among their top three concerns. This trend is particularly pronounced among businesses anticipating flat revenues, where 46% cited cash flow as their foremost challenge. To address these concerns, financial institutions are increasingly turning to cash-flow analytics for lenders to better understand and predict small business financial health.

Despite these challenges, the report indicates that most small businesses maintain reasonable financial buffers. Over 73% report having sufficient cash reserves to cover at least one month of operating expenses, a figure that has remained stable across recent surveys. This financial discipline underscores why lenders increasingly rely on cash-flow analytics and bank statement automation to accurately assess small business creditworthiness.

Non-bank lender reliance continues

The report highlights a continuing shift in small business financing options, with non-bank lenders maintaining their position as preferred funding sources since early 2024. This trend reflects ongoing challenges in accessing traditional bank financing.

Small business owners cited several factors driving this preference, including expectations of bank rejection, excessive documentation requirements and previous negative experiences with traditional lenders. The impact extends beyond newer ventures, with 40% of businesses operating for more than a decade reporting rejection by traditional banks. Many modern lenders are addressing these pain points by implementing AI-powered document automation to reduce paperwork burdens while maintaining accuracy and compliance.

This evolution in small business lending trends suggests that alternative financing models are becoming increasingly important to the small business ecosystem, particularly as traditional institutions maintain stringent lending criteria.

Looking ahead

As small businesses navigate the remainder of 2025, their demonstrated resilience will likely continue to be tested by inflation pressures and cash flow management challenges. However, the persistent optimism reflected in the survey suggests that the small business sector remains fundamentally confident in its ability to adapt and grow.

To learn more about the trends driving U.S. small businesses, view the complete Small Business Cash Flow Trend Report here. Small business lenders interested in better serving this resilient market segment can schedule a demo to explore how Ocrolus can help meet small business financing needs.

Key takeaways

• Despite economic headwinds, future growth confidence among SMBs remains strong, with 92% of small business owners anticipating moderate to significant growth in the next 12 months.
• SMB owners cited tariffs and cash flow concerns as their top concerns heading into the rest of the year.
• Non-bank lenders are continuing to draw SMBs away from traditional lenders due to the expectation they’ll be denied and the paperwork involved in their lending process.