Small Business Checkpoint: Turning the page?

Key takeaways from the Bank of America Institute:

·         Small business profitability edged higher in 2025, with the Bank of America small business account inflow‑to‑outflow ratio rising slightly above 2024 levels. However, profits lost steam as the year closed, with year‑over‑year (YoY) profitability growth turning slightly negative for the second consecutive month in December, reflecting mounting cost pressures.

·          In the last few months of 2025, small business uncertainty trended downwards and optimism improved, according to the National Federation of Independent Business. Still, small business uncertainty has remained historically high over the past 18 months due to a mix of consumer spending trends and policy affects such as tariffs.

·          After slowing throughout much of the second half of 2025, small business hiring activity picked up at year‑end, with payments to hiring firms up 7 percent from the 2024 average. Small retailers led the rebound, while services continued to lag, leaving the key question for 2026 as whether firms are ready to start hiring again.