After a difficult year in 2024, Intuit Inc.’s 2025 Intuit QuickBooks Small Business Index looks to understand challenges and identify solutions. The annual report assesses which sectors have the most and least growth and how these businesses can navigate higher interest rates through financing and technology.
Intuit Inc.’s research utilizes data from across Intuit QuickBooks in the U.S., Canada and the U.K., as well as official statistics from external sources in development with global economist Ufuk Akcigit. Key findings in the report include how high interest rates have been a major growth inhibitor for small businesses with small business employment experiencing its largest decline (year-over-year) since 2015. The sectors hit hardest were revealed as the leisure and hospitality industries.
Intuit QuickBooks report found that over the past 12 months, small business employment declined by 51,200 jobs while revenue declined by $11,850 on average, per small business. However, the data also shows that the most job losses were seen between October 2023 and January 2024. The good news is that since then, declines have slowed, with some movement toward reversing or offsetting those losses.
Small businesses have also shown some signs of slow growth following spiked interest rates when they had less access to credit. The businesses that reported working with banks offering greater access to credit have grown a bit faster. The authors of the report said that it is important to note that “this may also carry longer-term risks, as this growing reliance on credit cards can significantly increase the cost of small business growth and debt repayments.”
For financing, small businesses have also become increasingly reliant on credit cards — the number-one source for financing small businesses, according to the report. Between July 2023 and July 2024, the number of small businesses who reported using credit cards for financing doubled from 25 percent to 50 percent. These findings, said the authors of the report, stand as a major challenge for business owners and will continue to make it difficult for small businesses to create new jobs and grow.
“The acceleration of small business credit card usage has put owners in a difficult position,” said Akcigit, leading global economist and Arnold C. Harberger professor of economics at the University of Chicago. “While they can cover expenses in the short term, the high interest rates are inhibiting their growth in the long run as businesses focus on paying off past debts rather than investing in the future. Mounting credit card debt poses major risks to both small businesses and the greater economy, and we have already seen it have grave impacts on their ability to hire and retain talent.”
Technology has been a bright light for small businesses that have been able to adopt digital tools that have evolved to fit their needs. Notably, within the U.S. businesses that use at least eight digital tools to manage their business, Intuit QuickBooks found that 67 percent report seeing productivity gains and 45 percent report increased revenue. The top three benefits of utilizing digital tools were revealed as efficiency, accuracy and cost savings.
The authors of the report said that while growth for small businesses will not be a straight line, those that “make the most of digital tools to manage their business operations are the most likely to report higher productivity, higher revenue and higher levels of confidence in their future sales forecasts.”
Colin Twomey, vice president of growth & analytics at Intuit QuickBooks, added “small business success is vital to a healthy economy. While hurdles like credit card debt are evident, technology offers a way to reduce costs and fuel new channels for financial prosperity. Intuit remains committed to delivering the kinds of tools and data-backed insights that help propel small businesses forward.”
