Study Finds 82% of Small Businesses Bet They’ll Survive, but Higher Costs Still Bite

Small business owners rarely lack grit, but today their biggest threat may be too much optimism.

A record share of Main Street firms say they are sure they’ll be around two years from now, according to the PYMNTS Intelligence report “Main Street SMB Confidence Rises While Cash Flow Strain Lingers.” That surge in confidence may be obscuring deeper problems. Rising costs, weak cash flow and labor shortages could leave many businesses more fragile than they believe.

The report is based on a survey conducted in June among 513 small- to medium-sized businesses (SMBs) located in the United States. It captures an economy that looks steadier on the surface than it feels underneath.

Eighty-two percent of SMB owners say they are “very or extremely likely” to survive the next two years, the highest reading since tracking began in 2022. Micro-SMBs, the smallest firms with the thinnest cushions, powered much of the optimism rebound. Three-quarters of them now expect to weather volatility, up seven percentage points since March. At the same time, the report shows that financial health is uneven, hiring constraints remain acute, and cost pressures continue to squeeze margins.

• Micro-businesses are leading the rebound, but are still most exposed. Seventy-five percent now say they’re confident they’ll survive the next two years, up from 68% three months earlier. That improvement narrows the gap in resilience between tiny shops and larger peers, but it doesn’t erase it.
• Costs are the most widely cited drag. Thirty-four percent of SMBs point to higher prices for goods and services as hurting their financial health, with 14% calling it their single biggest challenge. Micro-firms in particular struggle with late payments and cash flow, while bigger firms highlight labor and benefit expenses.
• Hiring is the existential risk for mid-sized firms. Twenty-six percent of those businesses say an inability to hire new employees could keep them from surviving, four times the rate of micro-SMBs and six times that of other firms. In other words, finding workers is make-or-break for this slice of the market.

The broader story is one of contrasts, as 54% of SMBs report stronger financial health than six months ago. However, fragility persists, particularly among the smallest enterprises. Customer demand is the clearest tailwind, cited by 36% of micro-SMBs as their biggest positive factor. Sector differences also stand out. Construction and utilities firms report improved financial health at a rate 10 percentage points higher than average, making them a rare bright spot.

The undercurrent in all of this is that confidence, while encouraging, can mask vulnerabilities. Banks, acquirers and FinTechs reading these signals will find an audience eager for growth but still constrained by basic pain points, such as cash flow gaps, cost inflation and labor shortages. The report suggests that targeted solutions like faster settlement, accounts receivable automation, working capital tools and marketing support are critical to translating optimism into durable survival.

Small businesses may be betting heavily on themselves. The question is whether their lenders and technology partners will help ensure that optimism pays off, or whether Main Street is overestimating its own resilience.

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