New Report: Main Street Small Business Optimism Rises as They Successfully Navigate Macro Environment
Key findings include:
- Optimism and Growth. A large majority of small businesses continue to feel optimistic about business growth opportunities over the next 12 months, with 93% expecting moderate or significant growth, a slight uptick (1%) from Q4 2023.
- Financial Performance. Consistent with seasonal trends, revenue has decreased from its peak in Q4 2023, offset by decreasing expenses, resulting in a slightly higher revenue-to-expense ratio. Businesses continue to invest in employees, resulting in the payroll-to-revenue ratio increasing slightly to 19.5% in Q1 2024.
- Cash Flow Management. Businesses are managing cash flows through a variety of approaches, most commonly using a business line of credit (56.2% of businesses), while many also report delaying payment to themselves and family members until other bills have been paid (43.1%).
- Access to Credit. Banks appear to be limiting their lending, with nearly 40% of small businesses that have been in operation for over 20 years reporting they were denied a loan from a big bank. The percentage of transactions moving through payment apps instead of traditional payment methods continues to increase, with 26% of businesses reporting inflows from Venmo, Zelle or CashApp, which is an all-time high for this report.
"Small businesses continue to show resilience and believe in their potential, with their outlook remaining positive as they continue to successfully navigate challenges related to inflation and managing cash flow," said
"The small business landscape is constantly evolving and requiring lenders to stay attuned to the needs of borrowers," said
Key demographic findings include:
- Nearly all (92%) of family-run businesses are first-generation business owners, and a majority (58%) plan to pass the business on to a family member in the future.
- While nearly all surveyed small businesses have annual revenues under
$10 million , veteran-owned small businesses had the highest percentage of self-reported annual revenues, ranging between$1M and$10M .
The Q1 2024 report is based on quarterly survey responses from 422 small businesses with working capital loans from OnDeck and cash flow data from over 1.9 million small business applications, and provides deeper insights into the health of small businesses across all regions.
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