We are in unparalleled territory when it comes to the small business landscape. In this blog, we'll cover the recent boom in small business creation. Then, we'll look at the important lending trends of 2024.

Unprecedented Small Business Creation

In the face of economic turbulence, the entrepreneurial spirit of Americans shines bright. At the close of 2023, there was a slight setback in borrowing. But, the year saw an unprecedented surge in small business creation.  

A new record was set. 5.5 million small businesses were born1. This is more than the five-year average of 4.7 million formations1. This remarkable feat underscores the resilience and determination of entrepreneurs across the nation. 

People continue to pursue their dreams of owning a business. They do so despite challenges like inflation, labor shortages, and supply chain disruptions. In Q2 2024, we are poised to continue this momentum. The landscape remains uncertain, but the drive to innovate and succeed is unwavering. As the backbone of the economy, these ventures not only drive economic growth but also embody the essence of the American Dream.

What Does It Mean?

As inflation stabilizes, small businesses, once again, turn their attention to labor challenges. While inflation stabilizes and consumer spending increases, the spotlight shifts back to employment issues. 40% of small businesses are actively hiring, met with an unemployment rate at 3.9% 2,3. This gap between job openings and available workers poses a challenge. It affects small enterprises trying to meet demand. 

Striking a balance in the labor market becomes crucial for sustained growth and customer satisfaction. To address this, small businesses must adopt innovative strategies, such as flexible hiring practices and skill development initiatives. They need to stay agile and adaptable. This will help them take advantage of the opportunities from a recovering economy.

Stay Tuned for Trends

We analyzed the trends: 2024 is emerging as a transitional period for various factors. Stay tuned for our upcoming blog. We will delve into four strategies for lenders to enhance their support for small businesses and propel growth. 

In the meantime:

• Read the full Q2 report in our eBook. 

• Stay in-the-know on economic and credit insights by registering for our monthly Market Pulse webinar. You’ll hear the latest data and trends from industry experts.

• Uncover the latest in this month’s 2024 small business trends and predictions.

Sources: 

1 https://www.commerceinstitute.com/new-businesses-started-every-year/

2https://assets.equifax.com/marketing/US/assets/Equifax.MainStreetLendingReport.February2024.pdf 

3https://www.bls.gov/cps/