April 2024
Small Business Checkpoint: Dealing with inflation
As inflationary pressures remain, our data suggests small businesses have turned to credit cards as a source of financing.
Key takeaways
- According to the latest National Federation of Independent Business (NFIB) survey, small businesses report inflation as the single most important problem in operating their business. This is likely a strong driver behind the recent slide in small business optimism which reached the lowest level in 11 years.
- How are small businesses reacting to inflationary pressures? Bank of America aggregated and anonymized small business credit card data signals small businesses are increasingly reliant on credit cards to finance their operations, with small business credit card balances up 18% since 2019.
- While rising credit card balances raises some concerns, the inflation-adjusted credit card balance is comparable to or even lower than 2019 levels. Additionally, balance sheet conditions remain relatively healthy for small businesses.
Read our full analysis for a more in-depth look at these trends.
Small Business Checkpoint is a regular publication from Bank of America Institute. It aims to provide a real-time assessment of small business spending activities and financial well-being, leveraging the depth and breadth of Bank of America’s proprietary data. Such data is not intended to be reflective or indicative of, and should not be relied upon as, the results of operations, financial condition or performance of Bank of America.
