Small Business Checkpoint

Why are small business card balances rising?

Headshot of Anna Zhou

Anna Zhou

Headshot of Taylor Bowley

Taylor Bowley

November 2023

Key takeaways

  • Small business credit card balances are rising. The average balance has now exceeded 2019 levels, and businesses with annual revenue above $1 million are seeing the fastest increase, according to Bank of America internal data. While the initial rise was likely due to increased spending, over the last year credit card spending has been largely flat, while balances continue to rise.
  • This suggests to us that more small businesses are not paying the full balance and are using credit cards as a source of financing. While this points to financial stress for certain firms, the overall loan-to-net worth ratio for small businesses remains at historically low levels.
  • Looking at spending trends in October, total payments per small business client increased by 1.1% year-over-year (YoY), a rebound from September. Within sectors, we see relative strength in payments growth for construction. Despite signs that non-residential construction spending has started to moderate, residential construction spending is now showing signs of rebound.

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.