Small business optimism is at its highest level in six years, according to the NFIB Small Business Optimism Index. Lending conditions have similarly improved, reaching their peak in three years, as indicated by the American Bankers Association Credit Conditions Index. Additionally, a recent survey shows that 60% of small business leaders anticipate higher revenues in 2025 compared to the previous year.
At Founder Funding, we are witnessing a surge in financing activity, with a record number of applications in early 2025, even after a significant 28% growth in 2024. The momentum has only continued into February, signaling a dynamic business environment.
Despite this optimism, challenges persist—rising inflation, uncertainties surrounding tariffs, and evolving regulations present ongoing obstacles. While many of these factors are beyond your control, focusing on what you can manage will be key to strengthening your business during this time of flux.
So, how can you continue to move your business forward in this ever-changing landscape? Here are a few insights based on our experience working with thousands of clients:
Be Selective with Funding Options
In tighter markets, businesses often had to settle for whatever financing was available. Now, it’s an opportune time to partner with a provider offering tailored solutions, including custom funding and expedited approvals. Whether it’s a flexible line of credit or bridge capital to bridge gaps between projects, ensure you choose the right option that aligns with your business needs.
Interest Rates: Don’t Wait for the Perfect Timing
The unpredictability of interest rates remains a reality. While the Fed has paused rate cuts, there are signals that reductions may occur later in 2025. However, rising costs in materials and labor mean that waiting for lower rates could result in higher overall expenses. The average interest rate for small businesses in January 2025 was 9.4%, consistent with the previous year. Entrepreneurs are not waiting for perfect timing—they are proceeding with their business plans and adapting to the current conditions.
Reevaluate Your Financial Strategy
If the past few years have been about survival, now is the time to reassess your financial needs. Is it time to expand or refinance debt? A thorough audit of your business and goals will allow you to strategize effectively for the next 12 months. Shifting your focus from day-to-day operations to long-term objectives will ensure that you're positioning your company for sustained growth.
Don’t Be Discouraged by Policy Changes
While policy changes, tariffs, and trade tensions may seem daunting, many of these issues are still under review by Congress and the courts. In the meantime, focus on what you can control, and stay informed about potential opportunities that may arise from regulatory shifts. While it’s important to have contingency plans, don’t let uncertainty disrupt your day-to-day operations.
Inflation: A Reality to Manage
Inflation remains the top concern for many business owners. While it’s a challenge, there are ways to mitigate its impact. Focus on the value your business provides and consider cost-saving measures such as renegotiating supplier contracts or auditing your expenses. Many businesses have adjusted prices to keep pace, and staying proactive will help you remain competitive.
Leverage Technology and AI
As AI continues to evolve, it presents new opportunities for small businesses to streamline operations, enhance customer engagement, and drive efficiencies. Whether automating routine tasks or improving marketing efforts, the right AI tools can help level the playing field with larger competitors. Embrace these innovations thoughtfully, as they have the potential to provide a competitive advantage.
Navigating today’s economic landscape requires a blend of strategic planning and adaptability. At Founder Funding, we’re here to support your growth with flexible funding solutions designed to meet the unique needs of your business. Let’s explore how we can help you achieve your goals in this dynamic environment.