New Report: New Year Brings Increased Optimism Around Growth Expectations for Main Street Businesses

Rhea-AI Summary

A new Small Business Cash Flow Trend Report from OnDeck, Enova's (NYSE: ENVA) small business lending division, and Ocrolus reveals increasing optimism among small businesses for 2025. 94% of small businesses expect significant or moderate growth in 2025, up 2% from Q3 2024.

Key challenges identified include:

• 37% cite inflation as their top concern
• 30% identify cash flow as their primary challenge
• 76% of businesses bypassed traditional bank loans, up from 62% in Q4 2023

The report is based on responses from 454 small businesses with working capital loans and over 2 million small business applications for working capital financing during the past 15 months. The survey was conducted between December 2-11, 2024.

Positive

• 94% of businesses expect growth in 2025, up 2% from Q3 2024
• 76% of businesses choosing alternative lenders over traditional banks, up 14% YoY
• Increasing market share in small business lending segment

Negative

• 37% of businesses struggling with inflation
• 30% facing cash flow challenges

Insights

Financial Analyst

The Small Business Cash Flow Trend Report from OnDeck (Enova's small business lending division) and Ocrolus reveals a 94% optimism rate among small businesses regarding 2025 growth expectations—a 2% increase from Q3 2024. This optimism coincides with a dramatic shift in financing behavior: 76% of small businesses are now bypassing traditional banks for their capital needs, up from 62% in Q4 2023.

This 14% year-over-year increase in alternative lending preference represents a significant market expansion opportunity for Enova's OnDeck platform. With small business lending comprising approximately 30-35% of Enova's overall business mix, this shift could materially accelerate revenue growth in one of the company's higher-margin segments.

The report identifies inflation (37%) and cash flow challenges (30%) as primary small business concerns—precisely the issues that alternative lenders like OnDeck address through faster approval processes and more flexible underwriting criteria than traditional banks. This alignment between market needs and Enova's service offerings positions the company to potentially capture increased market share.

Particularly noteworthy is the mention of cash flow data playing "a much larger role in underwriting," which suggests Enova's partnership with Ocrolus is yielding competitive advantages in risk assessment. This technology-driven approach typically results in both better loan performance and higher approval rates—a rare combination that could enhance profitability metrics.

For investors, this report signals Enova's strong positioning in a growing segment of financial services that traditional banks continue to underserve. The robust sample size of 454 businesses and 2+ million applications provides statistical validity to these findings. As small businesses increasingly seek growth capital outside traditional banking channels, Enova's OnDeck platform appears well-situated to benefit from this structural market shift.

CHICAGO, Feb. 25, 2025 /PRNewswire/ -- Small businesses are increasingly optimistic about their growth expectations in 2025, according to the latest Small Business Cash Flow Trend Report from OnDeck, the leading small business lending company at Enova (NYSE: ENVA) and Ocrolus, the document AI and cash flow analytics platform for lenders.

Key findings include:

• Optimism and Growth: 94% of small businesses anticipate significant or moderate growth in 2025, a 2% increase compared to Q3 2024.
  
  
• Top Challenges: 37% of small businesses cited inflation as a top concern, followed by 30% of respondents who identified cash flow as their primary challenge in the current economic environment.
  
  
• Access to Working Capital: More small businesses are turning to alternative lenders for their financing needs, as 76% of respondents bypassed applying for traditional bank loans, up from 62% in Q4 2023.

"Small businesses are entering the new year with confidence, and we're seeing that optimism translate into plans for expansion and hiring," said Jim Granat, Co-President of Small Business at Enova. "We're seeing more businesses proactively seeking out alternative lenders like OnDeck, and we're proud to serve as a trusted partner when they need capital to fuel their next stage of growth."

"Fast and flexible funding solutions are critical for small businesses, as they position themselves for growth and success amidst shifting market conditions," said David Snitkof, SVP of Growth at Ocrolus. "To meet this need, small business funders are reevaluating their underwriting funnels to leverage data sources that provide a complete understanding of business financial health. We're seeing cash flow data play a much larger role in underwriting, helping funders qualify applicants with promising financial performance who may have otherwise been denied and expanding access to capital to help small businesses thrive."

The report is based on responses from 454 small businesses with working capital loans and over 2 million small business applications for working capital financing during the past 15 months. The nationwide survey was completed between December 2-11, 2024. For more information and complete survey results, please visit: ondeck.com/small-business-trends. 

About OnDeck^®
OnDeck^®, part of Enova International, is the proven leader in transparent and responsible online lending to small businesses. Founded in 2006, the company pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online. Today, OnDeck offers a wide range of term loans and lines of credit customized for the needs of small business owners. OnDeck has provided loans to customers in 900 different industries nationwide. For more information, visit www.ondeck.com.

About Enova
Enova International (NYSE: ENVA) is a leading financial services company with powerful online lending that serves small businesses and consumers who are underserved by traditional banks. Through its world-class analytics and machine learning algorithms, Enova has provided more than 11.8 million customers with over $59 billion in loans and financing. You can learn more about the company and its portfolio of businesses at www.enova.com.

About Ocrolus
Ocrolus is a document AI platform that enables faster and more accurate financial decision-making. The company analyzes documents with over 99% accuracy, regardless of format or quality, supporting over a thousand document types, including bank statements, pay stubs, and tax forms. Ocrolus provides a trusted solution to detect fraud, analyze cash flows and income, and streamline decisions for 400+ clients across a number of use cases. Customers such as Enova, PayPal, Brex, CrossCountry Mortgage, Plaid, and SoFi leverage Ocrolus automation to build delightful user experiences. To learn more, visit Ocrolus.com.

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SOURCE Enova International, Inc.

FAQ

What percentage of small businesses expect growth in 2025 according to ENVA's report?

94% of small businesses anticipate significant or moderate growth in 2025, showing a 2% increase from Q3 2024.

What are the top challenges facing small businesses in 2025 according to ENVA's survey?

37% cited inflation as the top concern, while 30% identified cash flow as their primary challenge.

How has small business lending shifted away from traditional banks in 2024-2025?

76% of small businesses bypassed traditional bank loans, increasing from 62% in Q4 2023.

What is the sample size of ENVA's Small Business Cash Flow Trend Report?

The report analyzed 454 small businesses with working capital loans and over 2 million small business financing applications over 15 months.