The United States (US) economy in 2024 demonstrated resilience in the face of ongoing global uncertainties, maintaining moderate output growth alongside a robust labour market and easing inflation. Real GDP expanded by 2.5% in 2024, supported by strong consumer spending and private investment, although growth moderated to 1.6% in the first quarter. The labour market remained strong, with the unemployment rate averaging 4.0% and sustained job creation across sectors.
Inflation, which had peaked in prior years, continued to moderate, with the Consumer Price Index (CPI) rising by 3.5% in April 2024 compared to a year earlier, reflecting the impact of tighter monetary policy and improved supply conditions (US Department of Labor, Bureau of Labor Statistics, 2025). The Federal Reserve reduced the federal funds target range to 4.25%–4.50% by year-end, following cumulative rate cuts intended to support economic momentum while ensuring inflation trends toward the 2% target.
The small business sector continued to contribute significantly to the US economy. As of 2024, there were approximately 33.5 million small businesses, representing 99.9% of all US businesses and employing 61.9 million workers, or 46.5% of the private workforce. Small business formation remained elevated, with sustained high rates of new business applications.
Business borrowing reflected the macroeconomic environment. Commercial and industrial (C&I) loan demand strengthened late in 2024, with net positive demand from small and medium-sized enterprises (SMEs), although early 2025 saw renewed tightening in credit conditions and weakening loan demand amid cautious lender sentiment. Small business loan approvals and utilization rates remained stable, although banks reported higher collateral requirements and tighter covenants.
Venture capital activity remained subdued in 2024, as investors shifted toward lower-risk assets amid rising funding costs and macroeconomic uncertainty. Angel and seed-stage investments showed relative stability, reflecting continued interest in early-stage innovation despite a broader decline in late-stage deal value.
The SBA and Treasury supported SMEs through programs such as the 7(a) and 504 loan programs, as well as the State Small Business Credit Initiative (SSBCI), which had allocated USD 8.4 billion to states, territories, and tribal governments by March 2024.
In 2024, SBA introduced the Agency’s first new pilot loan product in over ten years called the Working Capital Pilot (WCP). WCP offers a newly structured line of credit, made by 7(a) lenders and backed by SBA, and is designed to give greater flexibility to SME borrowers than a traditional term loan. WCP loans can be structured as Transition-Based or Asset-Based and provide an innovative fee structure to support growth-oriented businesses that previous SBA loan products could not always support. Additionally, these loans can be utilized for both domestic and international sales, providing a new financing option for US SME exporters.