Last updated July 2026 — Sources: SBA Office of Advocacy, Federal Reserve SBCS, U.S. Bureau of Labor Statistics, NFIB, U.S. Census Bureau
Key US Small Business Statistics 2026 — Quick Reference (compiled from Federal Reserve, SBA, BLS, Census Bureau)
| Metric |
Value |
Source |
Year |
| Total US small businesses | 33.2 million | SBA Office of Advocacy | 2023 |
| Share of all US businesses | 99.9% | SBA Office of Advocacy | 2023 |
| Americans employed by small businesses | 61.7 million (46.4% of private sector) | SBA Office of Advocacy | 2023 |
| New business applications filed | 5.5 million | U.S. Census Bureau | 2023 |
| New businesses that fail within year 1 | 20% | Bureau of Labor Statistics | 2023 |
| New businesses that fail within 5 years | 45% | Bureau of Labor Statistics | 2023 |
| Business failures involving cash flow problems | 82% | US Bank / Jessie Hagen research | 2019 |
| Small business loan approval — large banks | 13.8% | Biz2Credit Lending Index | 2024 |
| Small business loan approval — alternative lenders | 29.9% | Biz2Credit Lending Index | 2024 |
| Average days of cash reserves (small businesses) | 27 days | JPMorgan Chase Institute | 2022 |
| Small businesses experiencing cash flow issues | 60% | QuickBooks research | 2023 |
| MCA industry market size (US) | $20.3 billion | IBIS World / Allied Market Research | 2024 |
33.2M
Small businesses operate in the United States
According to the SBA Office of Advocacy, there are approximately 33.2 million small businesses in the US — representing 99.9% of all American businesses and employing 61.7 million workers, nearly half the private sector workforce.
Business Failure Rate Statistics
Sources: U.S. Bureau of Labor Statistics Business Employment Dynamics, SBA
65%
Of new businesses fail within 10 years
BLS survival rate data shows approximately 20% of new employer businesses fail in year one, 45% within five years, and 65% within ten years. Businesses that survive year five have substantially higher long-term survival odds.
20%
Fail within the first year
1 in 5 new employer businesses does not survive its first year of operation, most often due to cash flow problems, insufficient startup capital, or weak demand.
BLS
45%
Fail within five years
The 5-year survival threshold is the most cited benchmark for business viability. Almost half of new businesses don't reach their fifth anniversary.
BLS
82%
Of failures involve cash flow problems
A study by Jessie Hagen of US Bank found cash flow problems are a contributing factor in approximately 82% of business failures — making it the single most common cause of business closure.
US Bank / NFIB
- Industries with the highest 5-year failure rates: restaurants (~60%), retail (~50%), transportation (~45%)
- Industries with the lowest 5-year failure rates: healthcare (~70% survive), professional services (~65% survive), manufacturing (~60% survive)
- 29% of failed businesses cite "running out of cash" as the primary reason (CB Insights startup analysis)
- 23% of failed businesses cite "no market need" for their product or service
- 19% of failed businesses cite competition as the primary failure driver
- Businesses that sought external financing in year one had a 14% higher survival rate over 5 years (Federal Reserve research)
US Small Business Survival Rates by Year — Bureau of Labor Statistics Business Employment Dynamics
| Years in Business |
Survival Rate |
Failure Rate |
Notes |
| 1 year | 80% | 20% | 1 in 5 fail in year 1 — most common cause: cash flow |
| 5 years | 55% | 45% | Industry benchmark; restaurants and retail trend higher |
| 10 years | 35% | 65% | Businesses surviving year 5 have significantly better 10-yr odds |
| 15 years | ~25% | ~75% | BLS estimate; varies significantly by industry |
What this means for funding:
Cash flow problems are the #1 killer of small businesses — not competition, not the economy, not bad products. Access to working capital during growth phases, seasonal dips, and economic uncertainty is the most effective way to extend business survival.
Small Business Employment Statistics
Sources: SBA Office of Advocacy, Bureau of Labor Statistics
61.7M
Americans employed by small businesses
Small businesses with fewer than 500 employees employ 61.7 million Americans — 46.4% of the entire private sector workforce, more than large corporations combined.
SBA
1.9M
Net new jobs created by small businesses in 2023
Small businesses accounted for approximately 63% of net new private sector job creation over the past 25 years, consistently outpacing large employers in job growth.
SBA
$55K
Median small business employee salary
Median annual wages at small businesses are approximately $55,000, compared to $67,000 at firms with 500+ employees. The gap is partially offset by higher ownership stakes and flexible arrangements.
BLS
40%
Of small businesses plan to hire in 2026
NFIB's 2025 Small Business Economic Trends survey found 40% of small business owners planned to create new positions in the next 12 months, though 55% reported difficulty finding qualified candidates.
NFIB
- 55% of small business owners report difficulty finding qualified workers (NFIB 2025)
- The average small employer business has 10.1 employees
- Small businesses with 20–99 employees represent 22% of all small employer firms but 38% of small business employment
- 78% of small business owners report paying competitive wages to retain talent (NFIB)
- Turnover costs small businesses an estimated $1,500–$2,000 per employee on average
Small Business Financing & Credit Access Statistics
Sources: Federal Reserve Small Business Credit Survey 2023, Biz2Credit Lending Index, SBA
43%
Of applicants received no financing or less than requested
Federal Reserve Small Business Credit Survey 2023: 43% of small business financing applicants received none of the funding they sought or less than the full amount — leaving a massive financing gap that banks and SBA programs alone cannot fill.
54%
Of small businesses sought external financing in 2022
More than half of all small businesses sought external financing in the prior 12 months, up from 45% in 2019. The most common sources sought: bank loans, business credit cards, and SBA loans.
Federal Reserve SBCS
13.8%
Approval rate at large banks (early 2024)
Biz2Credit's lending index shows large bank approval rates for small business loans have dropped significantly from 28% in 2018 to approximately 13.8% in early 2024.
Biz2Credit
67%
Qualified MCA approval rate (ISO channels)
Merchant cash advance applications submitted through ISO broker channels are approved at approximately 65–75% for qualified applicants, versus 13–20% at traditional banks.
Industry Estimate
$688B
Total outstanding small business loan balance
Total outstanding small business loan and credit line balances reached approximately $688 billion in 2023, but demand consistently outpaces supply — particularly for businesses under 5 years old.
Federal Reserve
$32K
Average small business financing requested
The median financing amount requested by small businesses is approximately $32,000. The gap between the amount requested and received averages $14,000 for partially-funded applicants.
Federal Reserve SBCS
29%
Of small businesses operate with no outside financing
Nearly 1 in 3 small businesses has never sought outside financing — operating entirely on owner capital, personal savings, or internal cash flow. Many of these businesses are leaving growth potential on the table.
Federal Reserve SBCS
- 19.1% — Small bank approval rate for business loans (Biz2Credit 2024)
- 29.9% — Alternative lender approval rate for small business applicants
- 39% — Percent of small businesses that used credit cards as primary funding source
- The top reason for financing: operating expenses/cash flow (43% of applicants, Federal Reserve SBCS)
- The second most common reason: expansion or new opportunity (30% of applicants)
- 58% of businesses with under $1M revenue received the full financing they requested — versus 77% of businesses over $1M revenue
- Businesses that had been declined by a bank were 3.2× more likely to seek alternative financing within 60 days (Federal Reserve SBCS)
- 47% of small businesses report that access to capital is a "significant" or "very significant" challenge (NFIB)
Small Business Loan Approval Rates by Lender Type — 2024 (Biz2Credit Lending Index)
| Lender Type |
Approval Rate (2024) |
Trend vs 2018 |
Typical Timeline |
| Large banks (500+ employees) | 13.8% | ↓ Down from 28% in 2018 | 30–90 days |
| Small banks | 19.1% | Stable | 30–60 days |
| Credit unions | 18.9% | Stable | 30–60 days |
| Online / alternative lenders | 29.9% | ↑ Growing | 1–5 days |
| MCA — qualified applicants (ISO channel) | 65–75% | ↑ Growing | 24–72 hours |
The financing gap is widening:
Large bank approval rates for small business loans have declined from 28% (2018) to 13.8% (2024) — a 51% drop. Meanwhile, alternative financing (MCA, revenue-based financing, online lending) has grown from a small fraction of the market to filling a critical role in small business capital access.
Cash Flow & Revenue Statistics
Sources: NFIB, QuickBooks, JPMorgan Chase Institute, Federal Reserve
82%
Of business failures involve cash flow problems
The most cited statistic in small business: cash flow mismanagement — not lack of profit, not bad products — is the primary contributor in 82% of business failures.
US Bank Research
60%
Of small businesses experience cash flow issues
QuickBooks research found 60% of small business owners have experienced a cash flow problem in the prior year. The primary driver: late payments from clients (cited by 55% of affected owners).
QuickBooks
27 days
Average cash buffer for small businesses
JPMorgan Chase Institute research found the typical small business holds approximately 27 days of cash reserves — less than one month of operating expenses. This leaves businesses highly vulnerable to demand shocks.
JPMorgan Chase Institute
$62K
Average monthly revenue of MCA borrowers (industry estimate)
The typical business seeking merchant cash advance financing generates approximately $62,000 in monthly revenue — well above the $5,000 minimum but below the level required for traditional bank financing.
Industry Estimate
- The average small business waits 30–90 days to receive payment on invoices (NFIB)
- 64% of small businesses have been paid late by customers in the past year
- 71% of small business owners report that cash flow concerns affect their ability to grow
- During seasonal downturns, average cash reserves fall by 43% in retail and 37% in food service (JPMorgan Chase Institute)
- Businesses with consistent monthly revenue above $10,000 qualify for working capital advances; above $50,000/month qualifies for the most competitive rates
- The #1 use of working capital advances: payroll coverage (34% of MCA borrowers, industry estimate)
Ownership Demographics Statistics
Sources: SBA Office of Advocacy, U.S. Census Bureau Survey of Business Owners, Federal Reserve SBCS
38%
Of small businesses are minority-owned
Approximately 12.6 million US small businesses are minority-owned — 38% of the total. Hispanic/Latino-owned businesses have grown the fastest, at approximately 43% over the prior decade.
U.S. Census
42%
Of small businesses are women-owned
Women-owned businesses number approximately 13 million — 42% of all small businesses. They generate $1.8 trillion in annual revenue and employ 9.4 million workers.
U.S. Census
4.2M
Veteran-owned small businesses
Approximately 4.2 million small businesses are veteran-owned, representing 12.7% of all employer businesses. Veterans are 45% more likely to be self-employed than non-veterans.
SBA
- Minority-owned businesses are 3× more likely to be denied bank financing than white-owned businesses with similar financial profiles (Federal Reserve SBCS)
- Women-owned businesses receive less than 3% of total venture capital funding (PitchBook/All Raise)
- 59% of minority business owners report financing as a "top obstacle" to growth (Federal Reserve SBCS)
- Alternative lenders (MCA, online lending) serve a meaningfully more diverse applicant pool than traditional banks
- Immigrant-owned businesses account for 18% of US small businesses and generate nearly $500B annually (SBA)
Your Business Qualifies if You Have Revenue
Unlike traditional banks, we evaluate financing eligibility based on monthly deposits — not credit score alone. 500 FICO OK. Bank declines OK. Tax liens OK. Funded in 24–72 hours.
See If You Qualify — Free, No Obligation
Alternative Lending & MCA Statistics
Sources: Industry estimates (MCA industry reporting), Federal Reserve SBCS, Biz2Credit, CFPB
$12.4B
Estimated US MCA market (2026)
Merchant cash advance origination volume in the US is estimated at approximately $12.4 billion in 2026, up from approximately $9.8 billion in 2022. This excludes embedded MCA products (Shopify Capital, Square Capital, Stripe Capital) which deploy an estimated additional $8 billion.
Industry Estimate
24–72 hrs
Typical MCA funding timeline
Most MCA transactions are funded within 24–72 hours of approval. Same-day funding is available for returning merchants with clean bank history. This compares to 30–90 days for SBA loans and 14–30 days for traditional bank loans.
Industry Estimate
64%
Of MCA borrowers renew within 6 months
The MCA renewal rate is notably high — approximately 64% of merchants take a second or subsequent advance within 6 months of paying off the first. High renewal rates indicate borrower satisfaction and business utility.
Industry Estimate
500
Minimum FICO score for most MCA programs
MCA underwriting focuses on revenue consistency and deposit history rather than credit score. A 500 FICO minimum is standard — compared to 680+ required by most banks for business lines of credit.
Industry Estimate
1.15–1.45
Typical MCA factor rate range
Factor rates represent the total repayment multiplier (not an annual interest rate). A 1.25 factor on a $40,000 advance = $50,000 total repayment. Rates vary by industry, credit profile, and advance position.
Industry Estimate
$80K
Average MCA advance amount
The average merchant cash advance is approximately $80,000 for established businesses. First-time applicants typically receive 75–100% of average monthly deposits. Advances range from $5,000 to $5,000,000+.
Industry Estimate
- The MCA market has grown approximately 27% from 2022 to 2026
- Restaurant and food service businesses represent 23% of MCA origination volume
- Retail represents 18%, healthcare 14%, and construction 11%
- 34% of MCA borrowers use proceeds for payroll; 28% for inventory; 18% for equipment
- MCA approval rates are approximately 4.8× higher than large bank approval rates for similar applicant profiles
- As of 2026, at least nine states have enacted commercial financing disclosure laws — see the full State Commercial Financing Disclosure Matrix
Industry-Specific Statistics
Sources: BLS, SBA, NFIB, IBISWorld, industry-typical ranges
- Restaurants: ~60% 5-year failure rate; average monthly revenue $30K–$120K; most commonly seek MCA for payroll, inventory, and equipment
- Construction/Contractors: 30–60 day payment cycles create recurring cash flow gaps; average MCA advance $45,000–$150,000; often stack MCA with project start and pay down on completion
- Healthcare/Medical: 45–90 day insurance reimbursement delays drive working capital needs; 14% of MCA volume; higher approval rates due to predictable revenue
- Retail: Q4 (Oct–Dec) represents 35–45% of annual revenue for many retailers; seasonal MCA advances for inventory common; 18% of MCA volume
- HVAC/Plumbing/Electricians: Seasonal demand spikes; average annual revenue $250K–$1.2M; high equipment costs; MCA commonly used for truck/equipment financing
- Trucking/Transportation: Average annual fuel cost per truck: $50,000+; driver shortage adds wage pressure; MCA used for fuel advances, equipment down payments
- Salons/Beauty: 1 in 4 beauty businesses fails within 2 years; consistent daily card revenue makes them ideal MCA candidates
- Auto Repair: Average monthly revenue $28K–$65K; high parts inventory costs; often underserved by banks due to perceived volatility
Technology & Digital Statistics
Sources: NFIB, Visa, Google/IPSOS, Small Business Roundtable
71%
Of small businesses have a website
While 71% of small businesses now have a website (up from 51% in 2018), only 47% are optimized for mobile — critical given that 61% of small business product searches begin on mobile devices.
Google/IPSOS
58%
Of small businesses use social media for marketing
Facebook (77%), Instagram (52%), and YouTube (36%) are the top platforms used by small businesses. Social media marketing is the second most common free marketing channel after Google My Business.
NFIB
35%
Of small businesses sell online
E-commerce adoption among small businesses grew significantly after 2020, with 35% now selling products or services online — up from 19% in 2019. The pandemic accelerated 5+ years of digital adoption in 18 months.
U.S. Census
- 40% of small businesses use AI or automation tools in daily operations (NFIB 2025 survey)
- $14,000 — Average annual small business spend on digital marketing
- Businesses with a Google Business Profile receive 7× more calls than those without (Google)
- 63% of small businesses cite "getting new customers" as their top challenge (Salesforce State of the Small Business Owner)
- Businesses using cloud accounting software are 36% more likely to get approved for financing (QuickBooks)
Top Challenges Facing Small Businesses in 2026
Sources: NFIB Small Business Economic Trends, Federal Reserve SBCS, Goldman Sachs 10,000 Small Businesses Program
- #1 Inflation / rising costs — 37% of small business owners cite cost increases as their biggest problem (NFIB 2025)
- #2 Labor quality/availability — 22% cite inability to find qualified workers
- #3 Access to capital — 16% cite financing as the biggest challenge
- #4 Customer acquisition — 14% cite growing the customer base as their primary obstacle
- #5 Healthcare costs — 8% cite employee healthcare expenses as the dominant challenge
- 65% of small business owners work 6+ days per week (Guidant Financial)
- 52% of small business owners report having experienced burnout (SCORE)
- 76% of small business owners say their biggest mistake was waiting too long to hire help
Funding Helps Businesses Survive and Scale
Working capital is the #1 factor separating businesses that thrive from those that close. T.A.G. Business Funding provides fast working capital to small businesses nationwide — approval based on revenue, not credit score alone.
Apply Now — Free, No Obligation →
Citing This Page
This page is licensed under Creative Commons Attribution 4.0. You may freely cite, share, and reproduce statistics from this page with attribution to T.A.G. Business Funding (funding.towersassetgroup.com).
Suggested citation: T.A.G. Business Funding. "Small Business Statistics 2026." funding.towersassetgroup.com/small-business-statistics-2026. Accessed [date].