Read our full analysis for a more in-depth look at these trends.
Small Business Checkpoint: Signs of improvement
Small business profitability has picked up along with hiring, but persistent cost pressures continue to constrain growth.
July 2026
Key takeaways
- For the first time since the start of the year, small business profitability growth turned positive in June, according to Bank of America account data. Revenues are growing, but not fast enough to fully offset ongoing cost pressures, which has led to a prolonged period - more than six years - of small business owners planning to raise prices to combat falling sales expectations.
- Small firms are also contending with persistently higher interest rates. Still, rates have come down from their 2022 peak, and Bank of America loan payment growth per small business client has increased, suggesting modest demand although capex plans for small firms remains muted.
- At the same time, small business hiring activity improved in June from earlier this year, according to Bank of America payments data. This was especially true for small finance, insurance and real estate firms, suggesting AI hasn't affected job demand in white collar industries.
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.
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