Small Business Cash Flow Trend Report | OnDeck

Small Business Cash Flow Trend Report

OnDeck + Ocrolus

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About the Trend Report

Through an ongoing partnership, OnDeck and Ocrolus have released the eighth iteration of the Small Business Cash Flow Trend Report. OnDeck, part of Enova, is a market leader in small business lending and Ocrolus is a document AI and cash flow analytics platform for lenders. The report is based on two inputs:

  1. Quarterly customer survey responses from 531 small businesses with working capital loans from OnDeck across all regions. These businesses generally have fewer than 30 employees and less than $10M in revenues.
  2. Quarterly median cash flow data from over 3.26 million small businesses who applied for working capital financing during each quarter of a 15-month period.

The Q3 2025 report offers fresh insights into the state of small businesses and highlights ongoing trends observed over the past year.

Q3 2025 Key Findings

  • Growth Expectations. Small businesses remain confident, with 93% expecting growth in the next year and 31% projecting significant growth — the highest since Q1 2024.

  • Access to Working Capital. Seventy-five percent (75%) of small businesses surveyed are bypassing traditional banks in favor of non-bank or fintech lenders, a continuing and steady trend with companies preferring the quicker lending decisions and simpler process offered by fintechs.

  • Top Challenges. Cash flow and inflation remain the top concerns for small business owners, reported by 30% of respondents in Q3.

  • AI Adoption. A majority of business owners (52%) report that they have incorporated AI into their operations.

  • Navigating Tariffs. Most small business owners (65%) remain unsure about tariff impacts, saying other factors — such as seasonal demand (40%) and credit access (38%) — will shape their business strategy more than tariffs (18%) for the rest of the year.

Growth Expectations

Small business confidence remains strong. In fact, 93% of small business owners said they anticipate moderate to significant growth in the next 12 months, consistent with sentiment across the last eight quarters. These findings echo the U.S. Chamber of Commerce Q3 2025 Small Business Index, which reported that confidence reached an all-time high Index score of 72.

Future Growth Expectations

The Manufacturing sector had the highest growth expectations, with 100% of businesses surveyed expecting moderate to significant growth.

The Construction industry saw the biggest annual jump in optimism (+5%), with 53% citing seasonal demand — up from 41% in Q2 — and reliable access to credit as key factors shaping their business strategies.

Ocrolus cash flow data supports this sentiment, with Construction non-bank loan volumes up 5% year-over-year. Retail Trade also showed resilience, with more than 92% of businesses expecting moderate to significant growth despite ongoing macroeconomic uncertainty.

Confidence leads the way among younger businesses. Small businesses in operation for five years or less reported the strongest levels of optimism (97%).

Access to Working Capital

There is a continued shift from bank to non-bank and fintech borrowing among small businesses. In Q3 2025, 75% of small businesses surveyed bypassed a traditional bank when seeking funding — up slightly from 73% in Q2. The primary reasons cited were being overwhelmed with paperwork (42%) and fear of being denied credit (35%).

Among the 25% of business owners who applied to a bank first, 49% report being denied — the survey’s all-time high.

Even established businesses are being denied. Nearly half (46%) of the businesses operating 10+ years that went to a bank first were denied a loan.

Median Monthly Debt Inflow Volumes of Applications by Quarter

According to Ocrolus cash flow data, fintech loan volumes remained steady year-over-year (+1%), while bank loan volumes declined nearly 5%, despite a modest quarterly rebound. Industry-level patterns show a gradual shift in non-bank and fintech lending. Fintech loan volumes have risen most sharply year-over-year in Accommodation and Food Services (+6%) and Construction (+5%), reflecting these industries’ growing use of faster, more flexible funding sources.

This is consistent with findings in the July Senior Loan Officer Opinion Survey (SLOOS) from the Federal Reserve, which shows that banks reported tighter standards and terms for commercial and industrial loans (C&I loans) to businesses. Ocrolus cash flow data suggests those tighter credit conditions continued into Q3, reflected in steady fintech loan activity and softer bank lending volumes.

Top Challenges

Inflation remained a leading concern in Q3, especially in Accommodation and Food Services, where 40% of owners named it their top issue.

This aligns with the U.S. Chamber of Commerce’s Small Business Index, where 46% of small businesses said that inflation is their top concern. Cash flow also stood out as a key focus area for Manufacturing (47%) and Retail (36%). These patterns reflect businesses staying cautious with revenue-to-expense ratios while balancing borrowing.

Two challenges continue to be top of mind:

  • 30% cite the impact of inflation on expenses
  • 30% report cash flow management

Cash flow management remains steady, with 70% of small businesses reporting having enough cash to cover at least one month of operating expenses. To manage cash flow, small business owners employ a range of strategies. For the fifth consecutive quarter, the top three methods reported for managing cash flow in Q3 were: using a business line of credit (57%), delaying payment to themselves or family (53%) and making just the minimum payment on credit cards (42%).

Revenue is the third most common concern among all small businesses. The Ocrolus cash flow data shows that while small business revenue is stabilizing, it is down slightly year-over-year.

Median Monthly Revenue-to-Expense Ratio by Quarter

As seen in the Ocrolus chart above, revenue-to-expense ratios show consistency across sectors. The Construction sector, and Transportation and Warehousing sector, both show the healthiest revenue-to-expense ratios, and the Accommodation and Food Services and Retail sectors showed moderate year-over-year growth.

According to Ocrolus data, payroll-to-revenue ratios have remained mostly stable or improved year-over-year across industries. Transportation and Warehousing is a notable highlight, with labor costs decreasing as a share of revenue (down about 8% from Q3 of last year) — possible indicators of improved efficiency or increased automation in that sector.

AI Adoption

Fifty-two percent (52%) of small businesses are using AI in their daily operations in some capacity. Consistent with previous quarters, nearly two-thirds of those businesses are using AI for marketing projects and 33% are using it for task automation. The most preferred AI tool was ChatGPT (88%), followed by Google Gemini (28%) and Microsoft Copilot (24%).

At the industry level, Accommodation and Food Services reported the lowest AI adoption (38%), and Healthcare and Social Assistance reported the highest adoption rate at 63%.

Navigating Tariffs & Fluctuations in Customer Behavior

Survey results show that most small business owners (65%) are unsure how tariffs have impacted their business finances — up from 57% in Q2. Nearly half (48%) report taking no action in response to tariffs, while 15% are still assessing potential adjustments. About one in four (26%) say they have raised prices to offset tariff-related costs. This aligns with August data from the National Federation of Independent Business (NFIB) Small Business Optimism Index, which found the same share of small business owners anticipate raising prices in the coming quarter.

In the OnDeck survey, small business owners cite seasonal demand (40%), access to credit (38%) and consumer spending trends (37%) as the top factors influencing their business strategy for the remainder of the year, outweighing tariffs (18%) and labor availability (15%).

This emphasis is reflected in shifting customer behavior. Six in 10 businesses report seeing changes in customer behavior, such as a decrease in purchase size (cited by 46%) and customers seeking more information before making a purchase (41%).

Most respondents (56%) plan to maintain their holiday strategies from last year. Seasonal demand remains a key driver, particularly among Construction and Retail firms, where 53% say it will shape their plans for the remainder of the year.

Download Full Results

Methodology

OnDeck analyzed survey responses from 531 current customers, who completed the survey September 10 - 21, 2025. Please note: We have not verified this data or survey responses. It may contain errors or inaccuracies, and we make no representations or warranties as to its reliability, accuracy or applicability. Customers received an incentive for completing the survey.

Purpose

The data is designed to reflect the cash flow, financial health and liquidity of small businesses in the United States. Through tracking the unique combination of data available to Ocrolus and OnDeck, it will be possible to understand the trends affecting small businesses, the economic environment in which they operate and their access to capital.

Data

Ocrolus receives data on hundreds of thousands of small businesses each month as part of applications for credit. The data consists of transactional bank data in the form of bank statements or digital bank data feeds, generally comprising the most recent 3 - 6 months prior to the time of application. Ocrolus then uses its proprietary transaction tagging and analytical capabilities to generate a detailed set of cash flow attributes for each business, thereby facilitating a lender’s understanding of its financial health and ability to service additional debt. The report is comprised of small business loan application data from the previous 15 months. Previous period figures often change slightly as new loan applications provide retrospective data.

Filtering/Exclusions

The data is filtered to include only applicants within the 50 U.S. states. Applicant data with partial bank accounts was filtered out for the latest report as the partial data was skewing values lower, particularly for the most recent months.

Calculations

For each small business, for each calendar month, Ocrolus calculates revenue, credits, debits, expense, payroll, non-sufficient-funds transactions, proceeds from lenders, payments to lenders and the use of alternative payment methods. The full data set can be viewed for each respective report via the downloadable results.

Q2 2025 Key Findings

  • Future Growth. Small business growth expectations remained strong in Q2, with 92% of owners anticipating moderate to significant growth over the next year, and 26% expecting significant growth, down slightly from 30% in Q1.

  • Access to Working Capital. Small businesses prefer non-bank lenders due to their speed and ease, with 72% choosing them over traditional banks for working capital.

  • Top Challenges. Inflation (32%) and cash flow (31%) continue to be the primary challenges for small business owners.

  • AI Integration. Among those adopting AI, 66% report using it for marketing tasks.

  • Planning For Tariffs. Most small businesses (57%) are preparing for tariffs, with 31% considering passing price increases on to customers.

Future Growth

Small business confidence remains strong, undeterred by concerns over the economy and tariffs.

Future Growth Expectations

In Q2 2025, 92% of small business owners said they anticipate moderate to significant growth in the next 12 months, consistent with sentiment over the last year.

The Accommodation and Food Services sector stood out with the highest significant growth expectations (34%), and 96% forecasting growth overall in the year ahead. Cash flow data from Ocrolus suggests this sector seeks flexibility, with nearly half using fintech loans and a 16% year-over-year rise in revenue received from alternative payments.

Younger businesses are more bullish. Small business owners in operation for five years or less reported the most optimism about future growth prospects (98%).

Access to Working Capital

In Q2 2025, 72% of respondents went directly to non-bank lenders for credit, choosing to bypass traditional banks altogether — a pattern that’s held steady since early 2024. The primary reasons cited were expecting to be denied and being overwhelmed with paperwork. Some business owners also cited prior negative experiences, or said they didn’t even consider applying through their bank.

Industry-level trends seen in Ocrolus cash flow data reinforce this shift. Over the last year, fintech loan inflows have risen most sharply in the Wholesale, Accommodation and Food Services, and Retail sectors, reflecting these industries’ growing use of faster, more flexible funding sources.

Tenure doesn’t guarantee bank approval. Nearly 40% of those in business over 10 years reported being denied by traditional banks — a sign that even the most experienced businesses are not meeting current bank requirements.

Median Monthly Debt Inflow of Applications by Quarter

There appears to be a continued shift from bank to non-bank or fintech borrowing among small businesses that applied for loans last quarter. Non-bank or fintech loan inflows are up 4% year-over-year, while bank loan inflows have fallen 5%. Cash flow data also shows a steeper decline for rural borrowers, with bank financing falling at a more pronounced rate than among their urban counterparts.

This is consistent with findings in the July 2025 Senior Loan Officer Opinion Survey (SLOOS) from the Federal Reserve, which shows that banks reported tighter standards and terms for commercial and industrial loans (C&I loans) to businesses.

Top Challenges

Inflation remained a top overall concern, particularly in the Transportation and Warehousing sector, with 48% of business owners citing inflation as their top concern in Q2. Cash flow concerns have shown a steady climb — especially for industries like Construction (37%), where operating margins are tight and financing can be less accessible. These concerns align with cautious revenue-to-expense ratios and moderate reliance on borrowing, as seen in the cash flow data.

For small business owners anticipating no growth in revenues in the coming year, cash flow was overwhelmingly their top concern (46%); cash flow was the most cited among top three concerns in Q2 (72%).

Two challenges remain firmly at the top:

  • 32% cite the impact of inflation on expenses
  • 31% report cash flow management

Looking more closely at cash flow management, over 73% of small businesses report having enough cash to cover at least one month of operating expenses, consistent with previous surveys. To manage cash flow, small business owners employ a range of strategies. For the fourth consecutive quarter, the top three reported methods for managing cash flow were: using a business line of credit (59%), delaying payment to themselves or family (53%), and making just the minimum payment on credit cards (40%), based on Q2 2025 results.

Median Monthly Revenue-to-Expense Ratio by Quarter

As seen in the Ocrolus figure above, most industries saw sharp increases in their monthly revenue-to-expense ratio from Q1 2025, with the exception of the Transportation and Warehousing sector. This could suggest seasonality, investment cycles or better access to capital for certain industries.

According to Ocrolus data, payroll-to-revenue ratios have declined across most industries applying for credit over the past 15 months, suggesting shifts in cost structures or revenue performance. Transportation and Warehousing is a notable exception, with labor costs rising as a share of revenue — an indicator of mounting margin pressure in that sector.

AI Integration

AI is increasingly being used in day-to-day small business operations, with two-thirds of adopters using AI for marketing projects, such as content creation and email writing. Of those businesses using AI, 37% are searching for different business solutions, indicating a strong interest in AI as a strategic discovery and planning tool.

These insights show that businesses are applying AI to enhance agility, streamline workflows and make smarter decisions with limited resources.

Planning for Tariffs

While tariff-related headlines continue to circulate, their full impact may not yet be reflected in the experiences of most small businesses. Uncertainty remains high: 61% of respondents are unsure about the financial implications, even as many begin preparing for potential effects. Despite this ambiguity, 57% of small businesses are bracing for change, and nearly a third (31%) expect to pass higher costs on to customers. These responses echo Federal Reserve findings that businesses face significant uncertainty around tariffs, particularly the challenge of isolating tariff-driven cost increases when purchasing imported goods.

June data from the National Federation of Independent Business (NFIB) Small Business Optimism Index aligns closely, with 32% of small businesses expecting to raise prices over the next three months—nearly identical to the 31% cited above.

Download Full Results

Methodology

OnDeck analyzed survey responses from 410 current customers, who completed the survey June 17 - 30, 2025. Please note: We have not verified this data or survey responses. It may contain errors or inaccuracies, and we make no representations or warranties as to its reliability, accuracy or applicability. Customers received an incentive for completing the survey.

Purpose

The data is designed to reflect the cash flow, financial health and liquidity of small businesses in the United States. Through tracking the unique combination of data available to Ocrolus and OnDeck, it will be possible to understand the trends affecting small businesses, the economic environment in which they operate and their access to capital.

Data

Ocrolus receives data on hundreds of thousands of small businesses each month as part of applications for credit. The data consists of transactional bank data in the form of bank statements or digital bank data feeds, generally comprising the most recent 3 - 6 months prior to the time of application. Ocrolus then uses its proprietary transaction tagging and analytical capabilities to generate a detailed set of cash flow attributes for each business, thereby facilitating a lender’s understanding of its financial health and ability to service additional debt. The report is comprised of small business loan application data from the previous 15 months. Previous period figures often change slightly as new loan applications provide retrospective data.

Filtering/Exclusions

The data is filtered to include only applicants within the 50 U.S. states. Applicant data with partial bank accounts was filtered out for the latest report as the partial data was skewing values lower, particularly for the most recent months.

Calculations

For each small business, for each calendar month, Ocrolus calculates revenue, credits, debits, expense, payroll, non-sufficient-funds transactions, proceeds from lenders, payments to lenders and the use of alternative payment methods. The full data set can be viewed for each respective report via the downloadable results.

Q1 2025 Key Findings

  • Growth Expectations. Small business growth expectations remained relatively strong in Q1, with 93% of owners expecting moderate to significant growth over the next year, consistent with Q4 2024.

  • Access to Working Capital. Small businesses value the ease and speed of non-bank lending over banks. 76% of small businesses report turning to non-bank lenders and bypassing traditional banks, the survey's all-time high.

  • Tariff Unease. A majority of small businesses (55%) are taking action in preparation for tariffs, with 36% considering passing any price increases onto customers.

  • AI Adoption. More than half of small businesses report using artificial intelligence (AI) tools, with 17% using them daily or weekly. Among those adopting AI, 69% use it for marketing tasks.

  • Inflation and Cash Flow. Inflation and cash flow remain top challenges for small business owners, cited by 31% and 29% of respondents, respectively.

Growth Expectations

Small business confidence remains remarkably resilient, despite ongoing economic uncertainty.

Future Growth Expectations

In Q1 2025, 93% of small business owners expect moderate to significant growth — consistent with the 94% peak seen in Q4 2024. This continued optimism reinforces the trend observed throughout 2024, where owners consistently projected forward momentum, even amid inflation and operational challenges.

Access to Working Capital

The shift away from traditional banks continues to accelerate. In Q1, a growing number of long-tenured businesses reported difficulties accessing bank credit.

In fact, 76% of respondents bypassed applying to traditional banks — the survey's all-time high — citing paperwork and expecting to be denied as reasons for choosing non-bank lenders first.

For businesses operating 16+ years, 42% reported being denied by traditional banks.

For businesses operating 6–10 years, bank loan denial rates increased 16% compared to Q4 2024.

Median Monthly Debt Inflow of Applications by Quarter

In looking at applicants over the past two quarters, they have a much lower level of bank loan inflow versus non-bank/fintech loan inflow. This suggests that fintech funding remains stable while bank funding is tightening. The above chart, based on Ocrolus data, reflects businesses seeking funding in the past two quarters have had a significant 34% drop in bank loan inflows year-over-year, while fintech loan inflows are up slightly by 1%.

These figures reflect a deepening reliance on non-bank lenders, particularly as small business owners seek fast, flexible solutions that traditional institutions often fail to provide. The increased reliance on fintech lending and decline in traditional bank lending suggest that businesses value faster, more accessible funding as they navigate an unpredictable macro environment.

Tariff Unease

Businesses are increasingly uncertain about the impact of tariffs, based on February survey results — before the March tariff announcements. Among small business owners, 27% say tariffs could negatively affect their operations, and that number jumps to 47% among manufacturers who depend heavily on various raw materials. Only 8% expect any positive impact. More than half of small businesses (55%) are preparing to take some degree of action, with 36% considering passing costs onto customers.

Feelings are also mixed according to a March survey from The Bredin Report. More than half of all small and medium-sized businesses are concerned about the impact on operating costs, although 68% of medium-sized businesses also support tariffs in order to protect domestic industry.

AI Adoption

AI adoption is quickly becoming a fixture in small business operations and may be playing a role in addressing revenue and expense management. Over half of business owners report using AI tools, with 17% engaging with them weekly or more. Among adopters, nearly 70% leverage AI for marketing functions – particularly for content creation and email writing.

Inflation and Cash Flow

While concern has slightly declined from its high of 44% in Q2 2024, inflation continues to be a significant pressure point, particularly in industries like food service and transportation.

The top two challenges remain unchanged for the sixth consecutive quarter: The impact of inflation on expenses at 31% and cash flow management at 29%.

Looking at cash flow management, over 74% of small businesses report having enough cash to cover at least one month of operating expenses — consistent with previous surveys.

Small business owners report using a variety of strategies to manage cash flow. In Q1 2025, 25% of business owners said they maintained a minimum checking account balance equal to one month’s revenue as a cash flow management approach — a notable year-over-year decline from 41%. Meanwhile, 42% reported making just the minimum payment on credit cards — up from 28% a year earlier.

While concern has slightly declined from its high of 44% in Q2 2024, inflation continues to be a significant pressure point, particularly in industries like food service and transportation.

Looking at cash flow management, over 74% of small businesses report having enough cash to cover at least one month of operating expenses — consistent with previous surveys.

Small business owners report using a variety of strategies to manage cash flow. In Q1 2025, 25% of business owners said they maintained a minimum checking account balance equal to one month’s revenue as a cash flow management approach — a notable year-over-year decline from 41%. Meanwhile, 42% reported making just the minimum payment on credit cards — up from 28% a year earlier.

The top two challenges remain unchanged for the sixth consecutive quarter: The impact of inflation on expenses at 31% and cash flow management at 29%.

Download Full Results

Methodology

OnDeck analyzed survey responses from 437 current customers, who completed the survey February 17 - 27, 2025. Please note: we have not verified this data or survey responses. It may contain errors or inaccuracies, and we make no representations or warranties as to its reliability, accuracy or applicability. Customers received an incentive for completing the survey.

Purpose

The data is designed to reflect the cash flow, financial health and liquidity of small businesses in the United States. Through tracking the unique combination of data available to Ocrolus and OnDeck, it will be possible to understand the trends affecting small businesses, the economic environment in which they operate and their access to capital.

Data

Ocrolus receives data on hundreds of thousands of small businesses each month as part of applications for credit. The data consists of transactional bank data in the form of bank statements or digital bank data feeds, generally comprising the most recent 3 - 6 months prior to the time of application. Ocrolus then uses its proprietary transaction tagging and analytical capabilities to generate a detailed set of cash flow attributes for each business, thereby facilitating a lender’s understanding of its financial health and ability to service additional debt. The report is comprised of small business loan application data from the previous 15 months. Previous period figures often change slightly as new loan applications provide retrospective data.

Filtering/Exclusions

The data are filtered to include only applicants within the 50 U.S. states. Applicant data with partial bank accounts were filtered out for the latest report as the partial data was skewing values lower, particularly for the most recent months.

Calculations

For each small business, for each calendar month, Ocrolus calculates revenue, credits, debits, expense, payroll, non-sufficient-funds transactions, proceeds from lenders, payments to lenders and the use of alternative payment methods. The full data set can be viewed for each respective report via the downloadable results.