Small business owners have plenty of reasons to be cautious. Inflation continues to squeeze profits, operating costs remain high, and economic uncertainty has caused many entrepreneurs to postpone investments.
But something interesting is happening. Despite those challenges, small business owners are becoming more optimistic about their businesses — and increasingly willing to invest in their future.
Recent surveys from KeyBank and TD Bank suggest more owners are moving out of survival mode and preparing for growth. And according to banking executives who work directly with entrepreneurs, that shift is already showing up in how small businesses spend, borrow, and plan.
Small Businesses Are Moving Beyond Survival Mode
According to the KeyBank 2026 Small Business Survey, only 17% of small business owners describe themselves as being in survival mode, down from 23% in 2025. Meanwhile, 28% say they’re actively investing for long-term growth, compared with 22% last year.
And despite economic challenges, 94% of owners reported achieving at least one business accomplishment this year, while 62% achieved three or more.
The optimism extends to expectations for revenue.
TD Bank’s Small Business Year-End Outlook & Preparedness Survey found that 85% of respondents expect stronger revenue through the remainder of 2026. And 78% are more optimistic about the U.S. economy than they were six months earlier.
Sharon Miller, president of Business Banking at Bank of America, says the findings reflect what she’s hearing from entrepreneurs.
Through Bank of America’s ongoing Growth Tour, Miller has spoken directly with more than 1,000 business owners across 30 markets. Those conversations, she says, reveal a shift from caution toward hiring, investing, and pursuing growth opportunities.
The bank’s own data supports that observation. According to the September Bank of America Institute Business Checkpoint, small business profitability in August exceeded its 2025 average, while payments to hiring firms have been accelerating since March.
Business Owners Are Ready to Invest Again
That growing confidence doesn’t mean owners have forgotten the challenges of the past few years. In fact, TD’s survey found that 73% of small businesses delayed at least one investment in 2026 because of economic uncertainty.
But many are now preparing to move forward: 62% of respondents expect to seek financing before the end of the year. Among those planning to borrow, equipment or technology purchases (23%) and AI adoption (20%) are leading priorities.
“Small business owners continue to demonstrate remarkable resilience and determination,” says Chris Ward, head of Small Business Banking at TD Bank U.S. “While many are still navigating challenges ranging from rising costs to ongoing uncertainty, our survey shows they’re increasingly focused on growth and planning for future investment.”
B of A’s Miller says technology and talent are two areas where small businesses are directing their resources. Bank of America Institute data shows that small business AI-related spending increased 18.4% year over year in August.
However, Miller cautions against investing in technology simply because it’s new. Owners should first identify a specific business problem they want to solve, whether that’s reducing administrative work, improving operations, or freeing employees to focus on customers.
The goal, she says, is to make investments that deliver measurable value.
Ben Johnston, COO at small business lender Kapitus, is also seeing stronger demand for capital. According to Johnston, the average amount Kapitus lent to a small business increased from approximately $100,000 in 2025 to $120,000 through September 2026.
While those figures reflect Kapitus’s borrowers rather than the broader small business market, Johnston sees the increase as evidence that many of the businesses seeking financing are growing and qualifying for larger amounts.
He also believes entrepreneurs have become more confident in their ability to navigate economic challenges after years of adapting to inflation, higher interest rates, and other pressures.
Inflation Is Still Taking a Toll
Optimism, of course, doesn’t mean everything is going smoothly.
KeyBank found that 53% of small business owners consider inflation and rising costs a dominant threat, up from 50% in 2025. And some owners are personally absorbing the financial pressure: 33% say they’re covering rising business costs out of their own paychecks rather than passing those increases along to customers.
Still, there are encouraging signs that owners are strengthening their financial positions.
According to KeyBank, 23% of owners strengthened their cash reserves this year, while 26% paid down debt. More than half (54%) are confident they could cover one month of operating expenses using cash reserves alone, compared with 33% in 2024.
But preparedness remains a concern.
TD’s survey found that 97% of small businesses feel unprepared in at least one important area, particularly technology and operations (43%) and AI adoption (40%).
And as businesses become more dependent on digital tools, Miller says cybersecurity and fraud prevention deserve greater attention.
3 Financial Moves to Make Before 2027
For small business owners hoping to carry this momentum into the new year, Miller recommends three priorities.
- Stress-test your business plan.Consider how your company would perform under different economic conditions. Identify potential vulnerabilities involving expenses, supply chains, operations, or customer demand, and determine how you would respond.
- Review cash flow and liquidity.Examine your 2026 earnings and expenses, prepare a realistic forecast for 2027, and make sure you have enough cash available to handle unexpected costs. Look closely at recurring expenses and investments that aren’t delivering the expected return.
- Meet with your financial advisors.Schedule a year-end conversation with your banker, accountant, or other trusted advisors. Discuss financing needs, financial risks, and opportunities to improve your company’s position before the new year begins.
Miller also encourages owners to look for ways to improve productivity and control expenses without automatically raising prices. That might mean adopting technology that saves time, streamlining processes, or investing in employee retention.
What This Means For Small Business
What’s most encouraging about these surveys isn’t simply that small business owners are optimistic. It’s that many are backing up that optimism with action — rebuilding cash reserves, paying down debt, investing in technology, and planning for growth.
But confidence alone isn’t a business strategy.
As you prepare for 2027, take a close look at your finances, identify the investments that can make your business more productive, and make sure you have the cash flow to support your plans.
The goal isn’t about being optimistic about 2027. It’s to enter 2027 financially prepared to take advantage of the opportunities that lie ahead.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+
