Small Businesses Eye Record Growth with AI and Alternative Finance

CHICAGO, IL – January 28, 2026 – America's small businesses are entering 2026 with a surge of confidence, as a new report reveals that a record-high 94% of owners anticipate growth in the coming year. This wave of optimism, however, is not based on passive hope but on a proactive strategy of embracing new technologies and alternative funding sources to navigate persistent economic headwinds.

According to the latest Small Business Cash Flow Trend Report from online lender OnDeck and AI analytics platform Ocrolus, entrepreneurs are increasingly turning to artificial intelligence and non-bank lenders to manage challenges like inflation and cash flow, positioning themselves for expansion in an evolving marketplace. The findings, based on a survey of 468 small business owners and an analysis of over 3.45 million financing applications, paint a picture of a resilient and adaptive sector rewriting the rules of small business finance and operations.

The New Financial Toolkit: Why Main Street is Sidestepping Traditional Banks

One of the most significant trends highlighted in the report is the dramatic shift in how small businesses access capital. An overwhelming 74% of owners now leverage non-bank lenders for their working capital needs, choosing speed and accessibility over traditional banking relationships. This migration is not a fleeting preference but a structural change driven by market realities.

While small businesses remain optimistic, they consistently cite access to credit (37%) as a top factor shaping their strategic planning for 2026. Traditional banks, however, have become more cautious. Recent data from the Federal Reserve's Senior Loan Officer Opinion Survey (SLOOS) has shown a consistent tightening of standards for commercial and industrial loans. This has created a crucial gap that fintech lenders are rushing to fill.

The key to this shift lies in technology. Platforms like Ocrolus enable what is known as "cash flow-first underwriting," using AI to rapidly analyze financial documents and assess a business's health based on real-time transactional data rather than just traditional credit scores. This allows lenders to make faster, more informed decisions, often funding businesses that might be overlooked by conventional methods.

"With access to real-time, AI-driven cash flow insights, lenders can move faster, and business owners can make informed decisions that support success in the new year and long-term," said David Snitkof, General Manager of Small Business at Ocrolus, in the report's release.

This technological advantage is proving vital across various sectors. Industries such as wholesale, retail, and accommodation and food services have seen sharp increases in fintech loan inflows. Perhaps more telling is that nearly 40% of businesses with over a decade of operating history reported being denied by traditional banks, underscoring that even established enterprises are finding more viable funding solutions in the alternative lending market.

AI Beyond the Buzz: A Practical Engine for Growth

Parallel to the revolution in financing is a quiet but powerful integration of artificial intelligence into daily operations. The report finds that 56% of small businesses are now using AI, with an impressive 87% of them reporting a positive impact. While marketing remains the most common application (63%), the technology's influence extends far deeper.

For many small businesses, AI is becoming the great equalizer, allowing them to "punch above their weight" and compete with larger corporations. It automates mundane but critical tasks, freeing up valuable human capital for innovation and strategy. Beyond generating ad copy, AI-powered tools are handling invoicing and payroll, managing customer service inquiries through virtual assistants, and providing predictive analytics to inform inventory management and strategic planning.

This adoption is a direct response to the operational challenges businesses face. By streamlining back-office tasks and enhancing efficiency, AI directly addresses concerns over rising costs and labor. According to broader industry analysis, this integration has the potential to add significant points to annual productivity growth, a crucial factor for any small enterprise looking to expand.

However, the path to AI adoption is not without its hurdles. Many small business owners cite a lack of in-house expertise, high implementation costs, and concerns over data privacy as significant barriers. Overcoming these challenges often requires finding user-friendly, scalable solutions designed specifically for the small business environment, a market that software developers are increasingly targeting.

A Climate of Cautious Optimism

The record-high optimism captured in the OnDeck and Ocrolus report does not exist in a vacuum. It aligns with broader economic sentiment, including the NFIB Small Business Optimism Index, which recently surpassed its 52-year average. Similarly, a JPMorgan Chase survey found over 60% of owners feeling more positive about their business than at any point in the past five years.

This confidence, however, is tempered with a healthy dose of realism. Inflation (31%) and cash flow (29%) remain the top two challenges cited by business owners. They are acutely aware that their success hinges on navigating external pressures, with consumer spending trends (38%) being a primary factor influencing their plans for 2026.

This blend of confidence and caution is what defines the modern entrepreneurial mindset. Business owners are not waiting for ideal conditions; they are actively creating their own opportunities.

"Small business owners are entering 2026 with confidence and clarity," noted Cory Kampfer, Co-President of Small Business at Enova, OnDeck's parent company. "They're investing in AI and maintaining disciplined cash flow strategies while using a wider range of financing options, like OnDeck, to support sustainable growth."

Ultimately, the report suggests that the resilience of the small business sector is rooted in its ability to adapt. By leveraging the speed of alternative finance and the efficiency of artificial intelligence, entrepreneurs are not just weathering economic uncertainty but are actively building a foundation for robust and sustainable growth in the year ahead.