93% of Small Businesses Forecast 2026 Growth as Cash Flow Overtakes Inflation as Top Concern
Small businesses: 93% expect 2026 growth (32% significant, all-time high) but cash flow concerns lead at 31%, surpassing inflation. 58% now use AI with 89% reporting positive impact. Update bookkeeping for real-time visibility.
Record 93% growth optimism among small businesses is tempered by cash flow as the #1 worry at 31%; success demands upgraded bookkeeping practices, AI tools, and proactive cash management.
93% of small businesses expect growth over the next year, with 32% forecasting significant expansion — an all-time survey high. At the same time, cash flow has surged past inflation to become their top concern at 31%.
Released May 1 during the lead-up to National Small Business Week, the latest Small Business Cash Flow Trend Report from OnDeck and Ocrolus delivers this mixed but actionable message. Based on responses from 651 small businesses with working capital loans plus analysis of over 3.69 million financing applications, the data underscores why real-time financial visibility has moved from nice-to-have to non-negotiable.
31% of owners now rank cash flow as their primary worry, ahead of inflation at 29%. This marks the first time cash flow has claimed the top spot. Meanwhile, the median monthly revenue-to-expense ratio across industries slipped to 99.84% in Q1 2026, down from 100.47% in Q4 2025. Payroll costs are adding pressure, with the payroll-to-revenue ratio climbing to 17% — a 5% year-over-year increase.
AI Adoption Climbs as Owners Seek Efficiency and Insight
Small businesses are responding with technology. 58% now report using AI, up from 56% in the prior quarter and continuing a steady rise throughout 2025. Of those using it, 89% say it has positively impacted their business, with top benefits in marketing performance (40%), employee productivity (37%), and reduced rework (37%).
"Small businesses are showing a high level of adaptability as they move through 2026. Whether it's adjusting pricing, exploring new suppliers, or leveraging AI, owners are making deliberate choices supported by better data and clearer visibility into their financial performance," said David Snitkof, General Manager of Small Business at Ocrolus.
Common AI applications include ChatGPT (90% of AI users), with growing uptake for business research (43%) and information search (54% of owners).
Record Shift Away From Traditional Bank Financing
When growth requires capital, owners are voting with their feet. A survey-record 76% are bypassing traditional banks, with retail businesses hitting 82%. Access to credit ranks as the leading factor shaping strategy for 46% of owners, ahead of consumer spending (42%) and interest rates (35%).
Top reasons for seeking capital include covering normal business expenses (38%), increasing cash flow (36%), and supporting expansion (32%). Non-bank debt inflows rose to a median $8,824 monthly in Q1, up 5% year-over-year.
"Small businesses aren't slowing down — they're planning ahead, investing in growth and finding new ways to operate more efficiently. At OnDeck, we're focused on helping them access the capital they need to keep that momentum going," said Cory Kampfer, Co-President of Small Business Lending at Enova.
Common cash flow tactics reflect the pressure: 58% use a business line of credit, 51% delay owner or family payments, and 42% make only minimum credit card payments.
What Bookkeepers and Small Business Owners Must Do Now
For those handling the books, the report translates into a clear mandate: move beyond backward-looking compliance to forward-looking cash flow intelligence.
Businesses planning headcount increases (38% intend to hire in the next six months) or scaling operations need systems that flag payroll creep, invoice delays, and expense leaks in real time. The worsening revenue-to-expense ratio and rising labor costs make this urgent.
Practical steps include:
- Deploy AI-powered tools for reconciliation, anomaly detection, and forecasting to cut manual rework and deliver the "clearer visibility" owners crave.
- Shift to weekly or daily cash flow reviews rather than monthly closes, especially for industries like accommodation & food services (99.65% revenue-to-expense) or construction (100.11%).
- Prepare digital records optimized for alternative lenders, who increasingly demand audit-ready bank statement analytics rather than traditional financial statements.
- Integrate bookkeeping platforms directly with invoicing, payments, and payroll to shrink the timing gaps that erode liquidity.
- Document cash flow management strategies thoroughly — lenders and tax authorities both reward clean, data-rich records.
These changes directly address the 68% of businesses currently on track to meet or exceed their 2026 projections. The remaining third face a widening gap without tighter financial controls.
The findings arrive as the IRS promotes its Business Tax Account and other small business resources during National Small Business Week (May 3-9). Accurate, real-time records aren't just helpful for growth — they support compliant payroll reporting, tax filings, and access to the credit that 46% of owners say shapes their strategy.
As small businesses chase record optimism in 2026, the difference between projected growth and actual results will come down to who masters their numbers. Bookkeepers who deliver proactive cash flow intelligence and help integrate AI effectively will separate the businesses that thrive from those that merely hope to.