Financing SMEs and Entrepreneurs 2026: United States
Table of contents
The U.S. 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 (U.S. Department of Commerce, Bureau of Economic Analysis, 2025; U.S. Department of Labor, 2025).
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 (U.S. Department of Labour, Bureau of Labour 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 towards the 2% target (Board of Governors of the Federal Reserve System, 2025[1]).
The small business sector continued to contribute significantly to the U.S. economy. As of 2024, there were approximately 34.8 million small businesses, representing 99.9% of all U.S. businesses and employing 59 million workers, or 45.9% of the private workforce. (U.S. Small Business Administration, Office of Advocacy, 2024). Between March 2023 and March 2024, small businesses accounted for 1.1 million openings and 982,940 closings. (U.S. Small Business Administration, Office of Advocacy, 2025).
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 (Board of Governors of the Federal Reserve System, 2025). Small business loan approvals and utilisation rates remained stable, although banks reported higher collateral requirements and tighter covenants (Federal Reserve Bank of Kansas City, 2025).
Venture capital activity in 2024 grew beyond 2023, yet investors shifted towards 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 (Pitchbook and National Venture Capital Association (NVCA), 2025).
The SBA and Treasury supported SMEs through programmes such as the 7(a) and 504 loan programmes, 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 (U.S. Department of the Treasury, 2025).
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 utilised for both domestic and export sales, providing a new financing option for U.S. SME exporters.
Source: See Table 2
The U.S. Small Business Administration (SBA) defines size standards for businesses to be considered “small businesses” in the United States. Size standards vary by industry and are generally based on the business’ number of employees or average annual receipts. SBA issued the most recent size standards in March 2023. In addition to meeting these numerical standards, to be considered a small business by SBA, a business must be for-profit, independently owned and operated, be physically located in the United States, and may not be nationally dominant in its industry. However, generally, U.S. businesses with fewer than 500 employees are considered small businesses.
As of 2024, there were 34.8 million small businesses in the United States, which made up 99.9% of all U.S. businesses. Of those 34.8 million, 98% have fewer than 20 employees. Small businesses employed 59 million people, who account for 45.9% of all U.S. employees. About 44% of U.S. businesses are women-owned, 22.1% are minority-owned, and 5.5% are veteran-owned (SBA, Office of Advocacy, 2022[2]). In 2024, there were on average 430,000 new business applications per month, a growth of 50% over 2019 levels (U.S. Department of Treasury, 2024).
Engaging in international trade also bolsters SMEs’ contributions to the U.S. economy. In 2023, 277,779 U.S. companies exported goods valued at USD 1.8 trillion. Of those exporters, 270,014, or 97.2% were SMEs. Exports by small firms reached $588.4 billion, making up 33% of exports by identified firms. (U.S. Census Bureau, 2025)
Based on the Federal Reserve’s 2025 Small Business Credit Survey, the share of small businesses operating at a profit rose from 46% in 2023. The survey finds a slight decrease in small business revenue growth compared to 2023 survey data. Expectations for future revenue and employment growth, recent applications for credit, and the outcomes of those applications mostly held steady. Rising costs of goods, services, and/or wages—the most commonly cited financial challenge in the past three surveys—was again the most prevalent issue (Federal Reserve Banks, 2025).
In 2024, interest rates stabilised and began to fall in the last quarter of the year as demand for credit began to rebound. The Senior Loan Officer Opinion Survey reported a net tightening of lending standards and terms, with banks citing economic outlook uncertainties and industry-specific concerns (Board of Governors of the Federal Reserve System, 2025). Although the number of government-guaranteed loans to SMEs decreased by just over 100 000 in 2024, the total value of these government-guaranteed loans increased by more than USD 3 billion when compared to 2023 levels.
The Federal Reserve Banks’ Small Business Credit Survey also revealed that nearly 69% of small employer firms applied for some form of financing in 2024, with lines of credit and traditional term loans being most common. Applicants also reported increased use of personal credit cards and home equity loans to meet business needs (Federal Reserve Banks, 2025).
After continuing to raise rates throughout 2023, the Federal Reserve maintained a stable federal funds rate for the first 8 months of 2024. In September, a series of rate cuts began, totalling 100 basis points and bringing the rate to 4.33 by year-end. Despite this, banks continued to tighten terms throughout 2024, citing concerns over economic outlook, regulatory environment, and risk tolerance (Board of Governors of the Federal Reserve System, 2025).
Lending standards for commercial and industrial loans saw incremental tightening, including stricter collateral requirements and shorter loan maturities. The average interest rate on SME loans increased from 6.06% in 2023 to 6.77% in 2024 (Federal Reserve Bank of Kansas City, 2025).
In response to tighter bank credit conditions, non-bank finance sources, including leasing and asset-based lending, grew modestly throughout 2024 as firms diversified their funding sources. Venture capital deal activity rebounded from 2023 levels, and although there were declines in late-stage financing, angel and seed-stage deal values remained relatively resilient in 2024 (Pitchbook and NCVA, 2025).
SBA works with approximately 5,000 banks and credit unions, 250 Community Development Corporations (CDCs), over 170 non-profit financial intermediaries and Community Development Financial Institutions (CDFIs), and 300 small business investment companies (SBICs). The SBA Office of Capital Access has several programmes that provide direct loans and loan guarantees for a wide range of products designed to meet the diverse financial needs of small firms throughout their life cycle, starting from small start-ups to established firms. The largest of these programmes, the 7(a) Loan Programme, provides loan guarantees for working capital loans of up to USD 5 million to new and existing small businesses. The second-largest programme, the CDC/504 Loan Programme, provides loan guarantees for loans up to USD 5.5 million to be used for the purchase of major fixed assets, such as new facilities or equipment. In Fiscal Year 2024, SBA provided USD 146.4 billion in 7(a) loans, 504 loans, and microloan funding (U.S. Small Business Administration, 2025.
References
Board of Governors of the Federal Reserve System, "Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS)," 2025. https://www.federalreserve.gov/data/sloos.htm
Board of Governors of the Federal Reserve System, "Federal Funds Rate - Historical Data," 2025. https://www.federalreserve.gov/monetarypolicy/openmarket.htm
Federal Reserve Bank of Kansas City, "Small Business Lending Survey," 2025. https://www.kansascityfed.org/research/indicatorsdata/smallbusinesslendingsurvey
Federal Reserve Banks, "Small Business Credit Survey," 2025. 2025 Report on Employer Firms: Findings from the 2024 Small Business Credit Survey
Pitchbook and National Venture Capital Association (NVCA), "Venture Monitor," 2025. https://pitchbook.com/news/reports
U.S. Census Bureau, “Profile of U.S. Importing and Exporting Companies,” 2025. edbrel2023.pdf
U.S. Department of Commerce, Bureau of Economic Analysis, "Gross Domestic Product," 2025. https://www.bea.gov
U.S. Department of Labor, Bureau of Labor Statistics, "Employment Situation," 2025. https://www.bls.gov
U.S. Department of Treasury, “Small Business and Entrepreneurship in the Post-COVID Expansion,” 2024. Small Business and Entrepreneurship in the Post-COVID Expansion | U.S. Department of the Treasury
U.S. Small Business Administration, Office of Advocacy, “2024 Small Business Profile”, https://advocacy.sba.gov/wp-content/uploads/2024/11/United_States.pdf
U.S. Small Business Administration, Office of Advocacy, "Small Business Economic Profile," 2025.
https://advocacy.sba.gov/wp-content/uploads/2025/06/United_States_2025-State-Profile.pdf
U.S. Small Business Administration, "FY 2024 Capital Access Report," 2024. SBA 2024 Capital Impact Report | U.S. Small Business Administration
U.S. Department of the Treasury, "State Small Business Credit Initiative: Annual Report," 2025. https://home.treasury.gov
This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.
This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.
Note by the Republic of Türkiye
The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Türkiye shall preserve its position concerning the “Cyprus issue”.
Note by all the European Union Member States of the OECD and the European Union
The Republic of Cyprus is recognised by all members of the United Nations with the exception of Türkiye. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
© OECD 2026
Attribution 4.0 International (CC BY 4.0)
This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be bound by the terms of this licence (https://creativecommons.org/licenses/by/4.0/).
Attribution – you must cite the work.
Translations – you must cite the original work, identify changes to the original and add the following text: In the event of any discrepancy between the original work and the translation, only the text of original work should be considered valid.
Adaptations – you must cite the original work and add the following text: This is an adaptation of an original work by the OECD. The opinions expressed and arguments employed in this adaptation should not be reported as representing the official views of the OECD or of its Member countries.
Third-party material – the licence does not apply to third-party material in the work. If using such material, you are responsible for obtaining permission from the third party and for any claims of infringement.
You must not use the OECD logo, visual identity or cover image without express permission or suggest the OECD endorses your use of the work.
Any dispute arising under this licence shall be settled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Arbitration Rules 2012. The seat of arbitration shall be Paris (France). The number of arbitrators shall be one.