After a difficult year in 2024, Intuit Inc. The 2025 Intuit QuickBooks Small Business Index looks to understand the challenges and identify the 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. research. uses data from all Intuit QuickBooks in the US, Canada and the UK, 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 drag on growth for small businesses with small business employment experiencing its biggest (year-over-year) decline since 2015. Sectors hardest hit were found to be the leisure and hospitality industry.
The Intuit QuickBooks report found that over the past 12 months, small business employment fell by 51,200 jobs, while revenue fell by an average of $11,850, per small business. However, the data also shows that the largest job losses were seen between October 2023 and January 2024. The good news is that since then, the declines have slowed, with some moving towards reversing or offsetting these losses.
Small businesses have also shown some signs of slowing growth after interest rates rose when they had less access to credit. Businesses that reported working with banks that offered greater access to credit grew slightly faster. The report’s authors said it’s important to note that “this may also carry long-term risks, as this increased reliance on credit cards could significantly increase the cost of small business growth and debt service.”
For financing, small businesses have also become increasingly dependent on credit cards — the number one source of small business financing, according to the report. Between July 2023 and July 2024, the number of small businesses that reported using credit cards for financing doubled from 25 percent to 50 percent. These findings, the report’s authors said, pose a major challenge for business owners and will continue to make it difficult to create new jobs and grow small businesses.
“The acceleration of small business credit card use has put owners in a difficult position,” said Akcigit, chief global economist and the Arnold C. Harberger Professor of Economics at the University of Chicago. “While they may cover expenses in the short term, high interest rates are hampering their growth in the long term as businesses focus on paying off past debts rather than investing in the future. Rising credit card debt poses huge risks to both small businesses and the larger economy, and we’ve already seen it have severe 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 suit their needs. Specifically, within US 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 using digital tools were found to be efficiency, accuracy and cost savings.
The report’s authors 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 more likely to report higher productivity, higher revenues and higher levels of confidence in their future sales forecasts.”
Colin Twomey, vice president of growth and analytics at Intuit QuickBooks, added that “small business success is vital to a healthy economy. While obstacles like credit card debt are obvious, technology offers a way to cut costs and fueled new channels for financial prosperity. Intuit remains committed to providing the kinds of data-driven tools and insights that help drive small businesses forward.”
