New Report: Small Businesses Stayed Positive on Growth in Q1 - While Bracing for Economic Shifts

Rhea-AI Summary

OnDeck and Ocrolus released their Small Business Cash Flow Trend Report, revealing key insights about small business sentiment in Q1 2025. The survey shows 93% of small businesses expect growth in 2025, slightly down from 94% in Q4 2024. Notable findings include: 55% of businesses took preemptive action regarding tariff changes, 69% frequently use AI tools for marketing tasks, and a record 76% are turning to non-bank lenders instead of traditional banks. The report is based on responses from 437 small businesses with working capital loans and analysis of over 2 million small business financing applications over 15 months.

Positive

• Record 76% of small businesses turning to non-bank lenders, benefiting Enova's OnDeck platform
• 93% of surveyed businesses expect significant or moderate growth in 2025
• 69% of businesses adopting AI tools for marketing tasks, showing digital transformation

Negative

• Slight decline in business optimism from 94% to 93% quarter-over-quarter
• 55% of businesses concerned about tariff impacts, taking preemptive actions

Insights

Financial Services Analyst

Enova's small business survey reveals resilient growth outlook but declining optimism amid economic uncertainty, with significant shifts in lending preferences benefiting non-traditional lenders.

The latest Small Business Cash Flow Trend Report from OnDeck (Enova's small business lending division) offers several key insights that paint a nuanced picture of the small business lending market. While 93% of surveyed businesses still expect growth in 2025, this represents a slight decline from 94% in Q4 2024 – suggesting a marginal cooling in sentiment that bears monitoring.

The most significant finding for Enova's business model is that 76% of small businesses are now bypassing traditional banks in favor of non-bank lenders – an all-time high in their survey. This shift creates a substantial market opportunity for OnDeck as businesses seek alternative financing options. This trend likely stems from the regulatory environment where traditional banks face tighter lending restrictions, creating an opening for more agile fintech lenders.

The report also highlights how 55% of small businesses have taken preemptive action ahead of tariff implementation, potentially indicating increased borrowing activity as businesses front-load inventory purchases or secure working capital to navigate supply chain disruptions. This proactive approach typically drives demand for short-term business financing – precisely OnDeck's specialty.

Finally, the increasing adoption of AI tools (69% of businesses using them for marketing) suggests digital transformation within the small business sector, which could accelerate adoption of digital lending platforms like OnDeck. The 437 survey respondents and data from 2+ million loan applications provide substantial credibility to these findings, making this report a valuable indicator of demand trends in Enova's core market.

Survey Finds Over Half of Small Businesses Took Preemptive Action Ahead of Tariff Changes

CHICAGO, May 20, 2025 /PRNewswire/ -- Small businesses remain generally positive about growth potential, though optimism has fallen slightly in the face of economic uncertainty, 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:

• Growth expectations: 93% of small businesses anticipate significant or moderate growth in 2025 (compared to 94% in Q4 2024).
  
  
• Tariff concerns: A majority of small businesses (55%) reported taking action ahead of tariff implementation to prepare their businesses for potential operational or financial impacts.
  
  
• Rising AI use: More than half of small businesses (69%) are using artificial intelligence tools often to assist with marketing-related tasks.
  
  
• Businesses bypassing traditional banks: 76% of small businesses report turning to non-bank lenders and bypassing traditional banks, a survey all-time high.

"The small business community is resilient, and we see them working hard to prepare themselves to weather certain environmental factors such as tariffs. Whether it's additional capital needed for front-loading inventory or help with general cashflow demands, OnDeck is committed to supporting small businesses with accessible, transparent and dependable financing," said Jim Granat, Co-President of Small Business at Enova.

"With macroeconomic conditions evolving rapidly, small business owners need capital solutions that are as agile as they are," said David Snitkof, SVP of Growth at Ocrolus. "AI-powered analytics infrastructure enables lenders to evaluate real-time cash flow data to identify more qualified businesses and expand access to the capital they need to navigate uncertainty."

The report is based on responses from 437 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 February 17-27, 2025. 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 online financial services company that serves small businesses and consumers who are underserved by traditional banks. Over its 20-year history, Enova has provided over $61 billion in loans and financing to more than 12 million customers by offering a suite of market-leading products powered by the company's world-class analytics, machine learning algorithms and proprietary technology. 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 OnDeck's report?

According to OnDeck's report, 93% of small businesses anticipate significant or moderate growth in 2025, slightly down from 94% in Q4 2024.

How many small businesses are choosing non-bank lenders over traditional banks in 2025?

76% of small businesses are turning to non-bank lenders instead of traditional banks, marking an all-time high in the survey.

What percentage of small businesses are using AI tools for marketing in 2025?

69% of small businesses reported frequently using artificial intelligence tools to assist with marketing-related tasks.

How are small businesses preparing for tariff changes according to OnDeck's survey?

55% of small businesses reported taking preemptive action to prepare for potential operational or financial impacts ahead of tariff implementation.

How many small businesses were surveyed in OnDeck's Cash Flow Trend Report?

The report surveyed 437 small businesses with working capital loans and analyzed over 2 million small business applications for working capital financing over 15 months.