What divides growing small businesses from the rest? Strategic financing. New data from the 2025 Intuit QuickBooks Small Business Financing Report shows that small businesses leveraging business financing over personal funds are more likely to have healthier cash flow, make a profit, and be growing.
Key findings from the 2025 Intuit QuickBooks Small Business Financing Report:
- Almost 2x: Small businesses using business financing (vs. personal funds) are nearly twice as likely to be in an active growth phase.
- Business financing (including loans, lines of credit, business credit cards, trade credit, or factoring) is linked to healthier cash flow and a higher likelihood of profit than relying on personal financing.
- Owners of color are more likely to use personal credit cards for business spend and more likely to say that a successful financing application would be most beneficial to their business.
- 1.2x: Men are 1.2x more likely than women to expect they will be able to obtain financing for their business needs in the coming year.
- 1.8x: Employers are 1.8x more likely than non-employers to expect they can secure financing.
A closer look at small business growth and hiring:
- 65% of small businesses plan to invest in the next 3 months, prioritizing marketing, new software/AI, and equipment.
- 63% of non-employer businesses want steady or fast growth.
- 2 in 5 small businesses plan to hire in the near future.
The link between business financing, cash flow, and profit
Investment and growth plans mean little without stability. That stability often connects back to the tools owners use to manage their money. Owners that rely on business financing, such as a business credit card or loan, are more likely to report healthy cash flow and profitability than those using personal funds. These patterns point to a clear link between dedicated business financing and the financial footing associated with growth and sustained success.
The solo journey is just the start. A majority (63%) of non‑employer businesses (also known as self-employed or solopreneurs) say steady or fast growth is their primary goal, not stability. Their ambition creates a critical challenge: how to fund their goals.
Not all small businesses fund operations the same way. Non-employers surveyed depend more on their own money to keep things running. Their top sources of financing are personal credit cards (29%) and personal savings (28%). Employers take a different route, relying most on business credit cards (58%). This difference in funding reflects more than a matter of preference. It is connected to how businesses operate and the strength of the financial base they build on.
Personal funds can keep a business running, but it’s linked to a different financial picture than using business-specific tools. Operations using only business financing (like a business credit card or a loan) are 1.3x more likely to report healthy cash flow (56% vs 43%) and more than 1.1x more likely to be profitable (88% vs 76%). That stronger foundation can help them build stability and take on growth opportunities with confidence.
"Proactively leveraging strategic financing can provide a multitude of benefits to small business owners when it comes to stability and growth. By planning ahead and accessing the right funding, they have the flexibility to seize bigger opportunities, the breathing room to make smarter business decisions, and the foundational security to truly enjoy operating their business. Though acquiring debt can seem intimidating, it’s key to remember that this is a strategic investment in the future of the business. I liken this to college debt—as someone who was raised with very humble means, loans were the only way I could afford to attend my alma mater. By choosing to finance my education, I was able to lay the groundwork for growth and be intentional about the future. The same principle applies to business—identifying strategic sources of capital is a crucial investment in long-term success."
Jessica A. Schatko, Portfolio Manager, CohnReznick Advisory LLC
Inside small business growth: how business financing fuels progress
Hiring is not the only path to growth. Ambitious entrepreneurs are also growing by boosting revenue and investing in smarter tools that strengthen operations. Regardless of what form it takes, every growth strategy needs fuel, and that fuel is financing. Data from the 2025 Intuit QuickBooks Small Business Index Annual Report proves it. When interest rates started to climb in the US, businesses with better access to financing saw up to 30% higher revenue growth and up to 4% higher employment growth.
But not all financing is created equal. Data shows that using business financing over personal funds nearly doubles the likelihood that a business is actively growing. It highlights the marker between having a plan and making it a reality.
Even with headwinds in the job market, small businesses are planning ahead. Forty-one percent (41%) expect to hire in the coming months. Among those, 45% of employer businesses plan to add to their teams, while 20% of non-employers say they plan to bring on help.
But growth isn’t just about headcount. It’s also about investing in what makes a business stronger. More than 3 in 5 (65%) small businesses plan to invest over the next three months, with top priorities including marketing, new software or AI, or equipment upgrades.
Intent rises with access to capital of any kind. Seventy-four percent (74%) of small businesses with financing are planning near-term investments, compared to 37% of those without. From plan to momentum, the pattern holds. Those tapping into financing are more optimistic about future revenue growth (64% vs. 46%) and more likely to be in an active growth phase (48% vs. 35%).
But ultimately, one type of financing stands out. Small businesses using business financing are almost twice as likely to be in a growth phase (54%) compared with their peers relying on personal funds (28%). That separation can make the difference between keeping up and moving ahead.
"If small businesses see a growth opportunity, they shouldn’t let fear of financing hold them back. The right loan can be a tool—not a risk—when it’s tied to a clear strategy and a disciplined integration plan. For us, it turned what could’ve been a five-year growth plan into a single strategic leap, allowing us to grow through acquiring another business.”
Zak Volz, Owner & General Manager, Grandview Enterprises, LLC
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The small business financing gap: differences in funding types and expectations
For entrepreneurs, ambition is not in short supply. The real roadblock lies in the space between their goals and the capital to reach them. This funding gap doesn’t hit every business equally. Owners of color are more likely to be running their business on personal credit cards. This reliance highlights a crucial gap: they are also the most likely to identify a successful financing application as the most beneficial boost for their business. The divide doesn’t just stop at the bank. There's also a difference in expectations. Women and non-employers are less confident that they’ll be able to secure needed financing than their male and employer peers.
Owners of color lead small business investment plans
Ambition looks different across small businesses, and one group stands out: owners of color. They show a higher intent to invest, with 8 in 10 (81%) planning to put money back into their business in the near-term. This compares to 68% of their white peers. The momentum is clear, but there’s a disconnect between this high ambition and the financing methods they’re relying on to make it happen.
When ambition meets financing challenges
How does the disconnect actually play out? Owners of color are more likely to be putting business expenses on personal credit cards—a full third (33%) are doing so, compared to 22% of their white counterparts. It’s a strategy that can expose owners to personal risk and put a ceiling on growth. Their reliance on personal funds also shines a light on what’s missing. When asked what would be most beneficial to their business in the future, these ambitious owners were more likely to identify a successful financing application (35% vs. 21%).
Confidence in financing varies among small business owners
The funding divide isn’t just about tools. It’s also a split in expectations. The simple belief that capital is attainable isn’t shared equally across groups. When small businesses were asked if they expect to be able to obtain financing for their needs over the next year, the data revealed a gap that runs along multiple lines. Men are 1.2x more likely than women to believe they’ll get the funds they need (61% vs. 49%). The divide is even wider between employers (55%) and non-employers, who are left far behind at just 30%. This mindset is critical, potentially contributing to what the Federal Reserve calls discouraged borrowers: businesses that need funding but stay on the sidelines for fear of being denied.
What the data means
The data paints a clear picture: small business ambition is high, but the financial realities are fractured.
We see a strong connection between business financing and more robust business health. Small business owners who leverage business-specific tools, from credit cards to loans, are more likely to report profitability, healthy cash flow, and active growth.
But the data also highlights critical disconnects happening on two different fronts. First, there’s a gap in financing methods: ambitious owners of color show a higher reliance on personal funds, yet are also the most likely to state that a financing application would be their most beneficial boost to their business. Second, there’s a separate expectations gap: women and non-employers report lower confidence that they’ll be able to get the financing they need.
What this report shows is the what—the different tools being used and the gaps in expectations. What it doesn’t explain is the why. The data doesn’t tell us if the reliance on personal credit is a strategic choice or the result of a challenging financing journey. It doesn't pinpoint the exact drivers behind the expectation gap.
Understanding why is the next crucial step in clearing the path from ambition to achievement for every small business.
Methodology
The insights in this report are sourced from the Intuit QuickBooks Small Business Insights survey, a quarterly international study of small business health and priorities commissioned by Intuit QuickBooks since September 2021. The survey targets small businesses with 0-100 employees in the US, Canada, UK, and Australia.
For this specific analysis, we used the US findings from the July 2025 survey, which includes responses from over 2,200 small business owners and decision-makers age 18+. All survey respondents are anonymous and are remunerated for their time.
To uncover the deeper trends presented in this report, we conducted a cross-tabulation analysis based on respondents' answers to key questions, allowing us to compare distinct groups:
- By financing usage: Businesses that used any financing in the last 12 months vs. those that did not.
- By financing type: Businesses that used only business financing vs. those that used only personal financing.
- By employee size: Businesses with no employees (non-employers) vs. employer businesses (1-100 employees).
- By demographics: Comparisons based on the gender and race/ethnicity of the business owner or decision-maker.
Defining financing types
To understand the impact of different funding strategies, this report categorizes financing into two distinct groups: business and personal. This distinction is based on whether the financing was obtained specifically for the business or leveraged from the owner's personal assets and credit.
Business financing
This category includes financing obtained in the business's name for business purposes. For this report, it includes:
- Loan
- Line of credit
- Factoring or merchant cash advance
- Business credit card
- Trade credit
Personal financing
This category includes funds and credit products obtained in the owner's name, which are then used for the business. For this report, it includes:
- Home Equity Line of Credit (HELOC)
- Personal credit card
- Personal savings*
*Note: While personal savings are not a form of debt, they are included here as a common method of personal funding used to capitalize a business.
All survey findings included are statistically significant.
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