There are over 36 million small businesses in the United States, accounting for 46 percent of private sector jobs, according to the most recent data from the SBA’s Office of Advocacy. Between March of 2023 and March of 2024, individuals have opened 1.1 million new firms, contributing 1.2 million new jobs to the job market.
Whether you’re looking to open a business, an experienced entrepreneur or are looking to research small businesses, it can help to understand current trends in small business lending, demographics and industries. Bankrate uses a mix of data collected by federal agencies and private corporations to round up key points, giving you insights into the state of small business in 2025.
Small business statistic highlights
- There are 36.2 million small businesses in America, accounting for 46 percent of all private sector employment (SBA Office of Advocacy).
- Projected business formations are up 0.3 percent month-over-month and new business applications increased by 2.6 percent from June to July (U.S. Census Bureau).
- With almost 40 percent of small businesses in $100,000+ of debt, there has also been nearly a 15 percent decrease in satisfaction with both small banks and online lenders (The Federal Reserve).
- Half of employer firms surveyed in the Fed’s Small Business Credit Survey reported annual revenue between $100,000 and $1 million.
- Business formations are up slightly month-over-month and business applications increased by 2.6 percent from June to July (U.S. Census Bureau).
What is considered a small business?
The Small Business Administration offers size standards that define small businesses by industry — either by revenue or number of employees, depending on the industry. For example, the majority of small businesses in the agriculture industry are defined by revenue, whereas those in manufacturing are all qualified by the number of workers they employ.
Small business owners of every gender and race open businesses in nearly every industry, and contribute millions to the United States economy.
These businesses are the single greatest contributors to our GDP. It is in everyone’s interest that we help them thrive.
— Patrick Reily
co-founder of Uplinq, a credit scoring and assessment platform for small-business lenders
Small business lending statistics
Small businesses access funding from a variety of sources, including friends and family, personal savings and loans.
Small business loan debt is high
Nearly 40 percent of small businesses hold over $100,000 in business debt, according to the Fed’s findings from the 2025 Small Business Credit Survey. In the year prior to the survey, 59 percent of businesses had applied for some sort of financing, 56 percent of which were simply to cover operating expenses.
Fewer businesses sought financing at big banks
The number of small businesses that sought financing at big banks declined from 44 percent in 2023 to 39 percent in 2024, according to the Fed’s 2025 Small Business Credit Survey. This may be due to tightening credit requirements or overall dissatisfaction with lenders.
Lender satisfaction has declined
Overall lender satisfaction declined the most steeply with smaller banks and online lenders. Businesses surveyed reported a 12 point decline in satisfaction with small banks and a 13 point drop with online lenders.
High-risk firms were more likely to apply, and be approved for financing with online lenders
Medium- to high-risk borrowers were three times more likely to apply with online lenders than their low-risk counterparts. Of those who did apply with online lenders, over half of them said they made that choice due to approval chances and speed of funding. Medium- and high-risk borrowers were also more likely to be approved by online lenders than with other sources of funding.
Now small businesses are economically distressed, face more constrained access to credit and what credit is available is more costly due to high interest rates.
— Patrick Reily
co-founder of Uplinq, a credit scoring and assessment platform for small-business lenders
Small business industry statistics
Small businesses exist in almost every industry — from manufacturing and agriculture to retail and professional services.
Small businesses have the highest numbers in professional services and real estate.
20 percent of employer firms exist in the professional services and real estate industries, followed by non-manufacturing goods production at 19% percent, according to the Fed’s 2025 Small Business Credit Survey.
Wholesale trade, retail and manufacturing lead the way in American onshoring
Small businesses account for 99.4 percent of U.S. onshoring, or the transition by firms from overseas production to domestic production, according to the most recent data from the U.S. Census Bureau.
Construction is currently the fastest growing industry by hourly wages
The construction industry had the strongest hourly earnings growth — 3.27 percent — from June to July, according to the Paychex Small Business Employment Watch. Average hourly earnings are currently $35.78.
Small business employment statistics
From March of 2023 to March of 2024, nine out of 10 net new jobs were created by small businesses, according to the Office of Advocacy. There are 62.3 million small business employees in the U.S.
The Midwest tops the charts for small business job growth
Ohio had the highest small business jobs growth index in June. Dallas was the strongest growing metro area. Both owe their success to the expansion of jobs in the construction industry, according to the Paychex Small Business Jobs Index.
Hourly wages for small business workers have increased almost one dollar over the past year
The average hourly earning of a small business employee is $33.51, according to wage data from the Paychex Small Business Employment Watch, demonstrating growth of 2.74 percent over the past twelve months.
Small employer firms are making use of contract workers
The Fed’s Small Business Credit Survey reports that 44 percent of employer firms have contract workers on their payroll. Over half of all companies surveyed employ only one to four individuals.
There are over 30 million immigrants in the labor force
Immigrant workers account for over 17 percent of the labor force, and contribute to over a quarter of the agriculture and construction industries, according to the American Immigration Council.
Small business demographics
Small business ownership demographics span across gender, race and age.
Women own almost half of all small businesses
Women own 44.6 percent of small businesses in the United States, according to the most recent data from the U.S. Census Bureau.
20 percent of small businesses are minority owned
About 15 percent of U.S. small businesses are owned by racial minorities, according to the Fed’s Small Business Credit Survey. In addition, 11 percent of businesses are at least partially owned by disabled individuals.
Immigrants make significant contributions to American small business
There are almost four million immigrant entrepreneurs in the U.S. — they make up 23.6% of all American entrepreneurs, according to the American Immigration Council.
Why shop small businesses?
Small businesses account for trillions in economic activity and around half of U.S. GDP, according to the U.S. Chamber of Commerce. Between March of 2023 and March of 2024, they contributed 1.2 million new jobs.
Economy aside, many people enjoy shopping at small businesses more than large retailers. A recent Bankrate’s survey found that 90 percent of all U.S. adults enjoy the experience of shopping small for at least one reason over shopping with large businesses. Fifty-one percent of U.S. adults feel the unique gift ideas provide a better experience.
Similarly, 50 percent of Americans feel that small businesses’ customer experience is better than large stores, and 41 percent enjoy shopping small to foster a sense of community.
Other top reasons that people enjoy shopping at small businesses include:
- It provides better product quality.
- It’s convenient or saves time.
- Customer service has detailed product knowledge.
Frequently asked questions
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A small business is defined by the number of employees it has or the amount of revenue it generates. While there’s no one-size-fits-all standard for a small business, the Small Business Administration offers a list of size standards by industry.
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When starting a small business, you want to research the industry and the target customers that you’ll be creating a product or service for. Once you know that your product has a viable market, you can create a business plan that outlines the goals, strategies and metrics you’ll use to create the business. You should also estimate startup business costs and determine whether you need financing, such as a startup business loan, grant or crowdfunding campaign.
After achieving some initial goals, you can make decisions to grow the business.
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Small Business Saturday falls on the Saturday right after Thanksgiving each year. In 2023, Small Business Saturday is on November 25.
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