The National Federation of Independent Business’ (NFIB) Economic Trends Data is a monthly snapshot of how small businesses are feeling across the U.S., surveying up to 2,000 SMBs nationwide. The latest report, released in early August, highlighted an interesting contradiction. After optimism fell sharply in April due to tariff uncertainty, it has risen steadily each month and is now near its highest level of the year. Yet optimism is accompanied by rising uncertainty, as regulatory and economic conditions continue to swing between extremes. In July alone, uncertainty about the broader business landscape jumped 9%.
For many SMBs, conditions feel good right now. They want to expand but worry about how quickly circumstances could turn against them. With smaller cash reserves and greater vulnerability to supply chain disruptions than large corporations, uncertainty hits SMBs disproportionately hard. Still, SMBs today have more financial tools than ever, able to access working capital options and modern spend management solutions that are actually built for businesses of their size.
Optimism Is Not Enough
Optimism is a powerful force in itself. At Pipe, we see thousands of SMBs leverage it as fuel for growth. Companies like Handy’s LLC in Utah or Chrissy’s Creations in Ohio scaled from near-zero to hundreds of thousands in revenue within a few years, betting on their ideas and riding optimism into real businesses.
But optimism alone cannot keep a company alive. SMBs require infrastructure, tools, and consistent access to capital to weather inevitable challenges. The data underscores their vulnerability: according to JPMorgan research, the average small business holds less than four weeks of cash reserves. A sudden slowdown or unpaid invoice can quickly escalate into existential risk.
Traditional banking is rarely an option in these moments. Applications drag out for weeks, involve mountains of paperwork, and often carry approval thresholds that most SMBs cannot meet. Even when approved, the lag time between application and funding can be too long. While a positive outlook fuels ambition, it’s stable cash access that ensures survival when markets wobble.
Why Uncertainty Hits SMBs Harder
Small businesses are 9% more uncertain now than just a month ago. Uncertainty places a greater toll on SMBs. Unlike large corporations that can bulk-purchase materials to hedge against tariffs or disruptions, SMBs operate on thinner margins. Rising input costs or sudden vendor shifts quickly erode their cash position. Supply chain changes often push them to the back of the line, and customers delaying payments can leave them squeezed between money owed and money available.
In early 2025, looming tariffs underscored this structural weakness. Larger firms absorbed costs through scale, while small businesses faced immediate strain. Even when recession fears ease, SMBs feel caught in limbo, uncertain whether to lean into expansion or play defense against the next downturn.
Building resilience requires bridging tools that give them breathing room without pushing them into crippling debt.
Working Capital as a Bridge
Fortunately, SMBs don’t have to navigate this new economy alone or rely solely on traditional banks. A wave of vertical software-as-a-service platforms has emerged in recent years, targeting specific industries such as salons and home services. Platforms such as Boulevard or Housecall Pro integrate payments directly into everyday operations, creating valuable transaction-level data.
That embedded financial data allows capital providers to assess creditworthiness without relying on personal guarantees, FICO scores, or lengthy applications. Unlike banks with rigid loan structures, these new capital solutions meet SMBs where they are, offering smaller, flexible amounts drawn down as needed. The model is not a conventional loan, but rather a percentage-of-sales-based system: payments are lower during quieter months and scale up during busy ones.
This creates a natural stabilizer. A sudden downturn in demand doesn’t saddle the business with overwhelming fixed repayments, while strong months accelerate paydown without penalty. The approach adapts to real-time business realities, rather than forcing SMBs to contort around traditional banking rules.
Optimism is a strong starting point, but without safety nets, it’s fragile. With newer financial infrastructure tailored to SMB realities, small businesses can translate optimism into durable growth. These capital models are less about making risky bets and more about ensuring flexibility. For small businesses, this can be both an enabler and a backstop. It allows them to invest in growth during times of promise while maintaining the financial resilience to endure inevitable headwinds. In a landscape defined by volatility, that blend of ambition and adaptability might be the difference between growing and barely hanging on.
Luke Voiles is the CEO of Pipe. He has nearly two decades of leadership experience growing technology businesses within innovative industry leaders, including Square Banking at Block, Intuit’s small business lending unit, QuickBooks Capital, and as a distressed asset and credit special situations investor at Sixth Street Partners (TPG) and Lone Star Funds.
Photo courtesy Getty Images for Unsplash+
