Small Business Checkpoint

Though small business payments levels remain strong, small businesses are pulling back on spending and slowing hiring.

Headshot of Anna Zhou

Anna Zhou

Headshot of Taylor Bowley

Taylor Bowley

May 2023

Key takeaways

  • Small businesses are feeling less optimistic, as suggested by the National Federation of Independent Business. Generally, falling sentiment means businesses are less likely to spend and there are signs that they are pulling back on capital expenditure and hiring expenses.
  • As a result, overall payments are also cooling from elevated levels a year ago. According to Bank of America internal data, total payments per small business client contracted by 8% year-over-year (YoY) in April. Across sectors, we find small businesses in real estate and wholesale trade are showing the biggest pullback in spending.
  • Lastly, the latest Fed survey suggests credit conditions continue to get tighter for small businesses. While commercial & industrial (C&I) loan volume for small businesses is still increasing on a YoY basis, the pace of growth has moderated over the last month, adding additional pressure to small business spending.

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.

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