Higher Interest Rates & Access to Credit
Impacted Small Business Growth
Today, Intuit Inc. (Nasdaq: INTU), the global financial
technology platform that makes Intuit TurboTax, Credit Karma,
QuickBooks, and Mailchimp, released the findings of its 2025
Intuit QuickBooks Small Business Index Annual Report. Developed
in collaboration with leading global economist University of
Chicago Professor Ufuk Akcigit and his co-authors, the report
reveals how high interest rates were a growth inhibitor for small
businesses as US small business employment experienced its largest
year-over-year decline in 2024 since 2015, with the leisure and
hospitality industries hardest hit.
Fresh Insights on US Small Businesses
While overall employment is rising in the US, small business
growth is lagging, indicating that jobs are moving from small
businesses to larger businesses. The report found that small
business employment declined by 51,200 jobs over the past 12 months
while revenue declined by $11,850 per small business, on average.
This was the largest year-over-year decline in employment since
2015 and the third consecutive year-over-year decline in revenue.
And on an annual basis, all 12 sectors and four of the eight US
regions the study covers show declining employment from October
2023 to October 2024.
Looking more closely at the monthly data over that period,
however, reveals that most of the job losses occurred between
October 2023 and January 2024. Since then, the declines have
generally slowed or even reversed—offsetting some of the earlier
job losses. For example, while the construction sector lost 13,100
jobs at the end of 2023, it created 11,400 jobs at small businesses
in 2024.
Overall, small businesses grew more slowly after the spike in
interest rates if they had less access to credit. Those that were
hit the hardest had up to 30% lower revenue growth and 4% lower
employment growth compared to other small businesses. Meanwhile,
small businesses working with banks that were able to offer greater
access to credit have been able to grow faster—at least in the
short term. However, 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.
Rising Credit Card Usage Creates Short Term Gains and Long
Term Risks
Small businesses are becoming more reliant on credit cards,
which remain the number one source of small business financing. The
number of small businesses using credit cards for financing doubled
between July 2023 (25%) and July 2024 (50%). Despite providing
short term gains and quick access to capital, credit card usage as
a primary form of business financing creates long-term financial
risks associated with carrying higher balances and incurring
greater interest payments. In 2024 alone, credit card interest
payments among US small businesses rose by 14%. This follows a
1.5-times increase from 2022 to 2023 in the percentage of small
businesses paying over $450 in interest alone on their credit cards
each month. The rising costs of borrowing money coupled with
limited access to capital with traditional lenders is making it
more 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,” says Ufuk 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.”
Digital Tools are Critical for Growth and
Productivity
As technology continues to evolve and proliferate, adoption of
digital tools within small businesses has increased - with positive
impacts on their bottom line. Among US businesses that use eight or
more digital tools to manage their business, 67% saw productivity
gains and 45% reported increased revenue. These results are
significantly higher than businesses with lower digital adoption;
for comparison, among small businesses using two or fewer digital
tools, only 36% reported higher productivity and only 30% reported
higher revenue.
On top of the immediate gains, higher use of digital tools has
also helped small businesses to create stronger revenue forecasts
and boosted confidence in future sales. For example, 72% of high
users of digital tools feel confident in their sales projections
compared to only 50% of low-users of digital tools.
“Small business success is vital to a healthy economy,” says
Colin Twomey, Vice President of Growth & Analytics at Intuit
QuickBooks. “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.”
A More Holistic View of Small Business Health
One of the great strengths of this report is its well-rounded
look at small business health. Small business growth is not a
straight line, and the continued expansion of data points
considered in the annual report allows for more nuanced analysis of
the landscape. QuickBooks customer Judd Robertson, president at
Mighty Pine Heating, Cooling, Plumbing & Electric in Colorado,
explains that for his business, signs of growth don't necessarily
all appear at once.
"We're making investments in the foundation of Mighty
Pine—hiring a new customer service person, hiring a new person to
deal with the rebates. That takes our margin away, but it supports
our employees in the field," Robertson says. He sees these
investments as laying the foundation for sustainable growth—and as
promising signs for the year ahead. "We could not be here today if
we didn't have the internal team members that were able to [hire].
I think we're going to thrive in 2025, and that's because of the
folks we have under our roof."
As many business owners prepare for the year ahead, this report
offers a comprehensive look at the trends and advancements that
could continue to impact their growth.
For more insights, check out the Intuit QuickBooks Small
Business Index Annual Report here. To stay up to date on the latest
monthly Index releases, visit the Intuit QuickBooks Small Business
Index interactive hub.
About the Report:
RIGOROUS METHODOLOGY
In partnership with Intuit QuickBooks data analysts, the
report’s findings are based on a new analysis led by Ufuk
Akcigit (Arnold C. Harberger Professor of Economics at the
University of Chicago), Raman Singh Chhina (PhD Researcher,
University of Chicago), Seyit M. Cilasun (Professor of
Economics, TED University), Javier Miranda (Head of the
Center for Business and Productivity Dynamics, Halle Institute for
Economic Research), and Nicolas Serrano-Velarde (Professor
of Finance, Bocconi University). The analysis uses the following
data sources:
- Intuit QuickBooks Small Business Index: employment and
revenue trends among small businesses in the US, Canada, and the UK
from October 2023 to October 2024, based on a total worldwide
sample of 557,000 small businesses. Full methodology details
available here. Note: the Index does not reflect the QuickBooks
customer base or Intuit’s business.
- Intuit QuickBooks customer data: anonymised, aggregated,
and benchmarked or reweighted to reflect the wider population of
small businesses in the US, Canada, and UK (not the QuickBooks
customer base or Intuit’s business) to provide new insight into
small business access to credit, credit card expenditure, payments
against credit card balances, and interest payments between 2019
and 2024. Samples: 249,000 US small businesses with 0-100 employees
with credit card data recorded in QuickBooks from 2019 to 2024
(Figures 52 and 53) and 677,000 US small businesses with 0-100
employees with credit card data recorded in QuickBooks in 2022 and
2023 (Figure 54). Full methodology available in the report.
- Intuit QuickBooks Small Business Insights: quarterly
online surveys, commissioned by Intuit QuickBooks, of more than
5,000 small businesses (0-100 employees) in the US, Canada, and UK.
The report uses the July 2024 wave of these surveys, with a total
sample of 5,183 respondents (comprising 3,012 in the US; 1,013 in
Canada; and 1,158 in the UK). Note that “digital tools” are broadly
defined and grouped by type (e.g. “social media” and “remote
work”). Methodology details available here.
- Official statistics and other external sources,
including publicly available data from: the U.S. Census Bureau;
U.S. Bureau of Labor Statistics; U.S. Bureau of Economic Analysis;
Federal Deposit Insurance Corporation; Federal Reserve Bank of St.
Louis; Bank Holding Company (US); Statistics Canada; Office for
National Statistics (UK); OECD; World Bank.
New insights from the analysis of this data comprise three major
topic areas in the 2025 Intuit QuickBooks Small Business Index
Annual Report:
- Jobs and revenue growth: highlighting the critical role
that small businesses play in the US, Canadian, and UK economies,
focusing on which sectors and regions have seen the most and least
growth over the past 12 months.
- Small business access to financing: a close examination
of the impact of interest rates and credit card usage on small
business success, using anonymised, reweighted data from up to
677,000 QuickBooks customers in the US and survey data from more
than 5,000 small businesses in the US, Canada, and the UK (see
sources and sample details above).
- Small business adoption of digital tools: the
relationship between digital tools (including AI and e-commerce)
and small business productivity, growth, and confidence.
The full methodology is provided in the appendix of the 2025
Intuit QuickBooks Small Business Index Annual Report.
About Intuit
Intuit is the global financial technology platform that powers
prosperity for the people and communities we serve. With
approximately 100 million customers worldwide using products such
as TurboTax, Credit Karma, QuickBooks, and Mailchimp, we believe
that everyone should have the opportunity to prosper. We never stop
working to find new, innovative ways to make that possible. Please
visit us at Intuit.com and find us on social for the latest
information about Intuit and our products and services.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250114567920/en/
Intuit QuickBooks: Jen Garcia
Jeng@accesstheagency.com
Intuit (NASDAQ:INTU)
Gráfico Histórico do Ativo
De Dez 2024 até Jan 2025
Intuit (NASDAQ:INTU)
Gráfico Histórico do Ativo
De Jan 2024 até Jan 2025
