Confidence Is Rising—But So Is Risk: Where Smart Owners Stay in the Healthy Zone

New data shows record optimism among small businesses—but unchecked leverage could turn that confidence into collapse.

TL;DR

Small business confidence is surging — 93% of owners expect growth in 2025 — but three-quarters are turning to fintechs and alternative lenders instead of banks. This dual trend is both opportunity and warning: optimism fuels deal flow and valuation strength, but non-bank debt can mean higher costs, weaker long-term stability, and greater scrutiny for buyers.

Smart owners: use fintech access to scale and systemize faster.

Smart buyers: evaluate where that optimism hides leverage risk.

The Good News: Main Street Believes in Itself Again

A recent Enova/Ocrolus Small Business Report shows a striking recovery in sentiment:

• 93% expect growth in the next 12 months
• 52% already use AI in daily operations
• 75% rely on non-bank financing

Confidence this high signals a return of entrepreneurial momentum after years of inflation anxiety and rate hikes. More owners are reinvesting, expanding product lines, and hiring again — all strong indicators for BusinessOwner.com buyers hunting for operationally healthy acquisitions.

Why it’s good for Business Owners

1. Higher valuations: confident markets attract buyers. Growth expectations push SDE multiples upward.
2. Stronger buyer demand: optimism translates to more acquisition activity and easier deal conversations.
3. Easier access to working capital: fintech lenders offer speed, flexibility, and less paperwork — perfect for nimble SMBs that need to grab market share quickly.
4. Systemization opportunity: with more capital in motion, owners can finally invest in CRM, automation, and AI-driven workflows — core to your BusinessOwner.com tool stack.

The Catch: Fast Money Comes With Strings

Skipping traditional banks can be both blessing and curse. Fintech loans and revenue-based advances are convenient, but their APRs often exceed SBA-backed rates by 2–4×, and they lack long-term predictability.

Why it’s risky

1. Debt layering: Many small businesses quietly stack multiple short-term advances to survive — creating invisible liabilities that surface only during due diligence.
2. No relationship banking: when downturns hit, fintechs don’t renegotiate the same way a local banker might.
3. AI hype vs. infrastructure: adopting tools doesn’t equal integration. Half of “AI-using” firms lack clean data or workflow alignment — a red flag for buyers.
4. Bubble potential: if confidence outpaces cash flow reality, expect valuation corrections — especially for service-heavy companies.

For Buyers: Read Between the Lines

When evaluating acquisition targets, optimism can mask fragility. Ask:

• Where is growth funded from? (Revenue, retained earnings, or stacked fintech debt?)
• Is AI delivering ROI or just experimentation?
• Are operational systems built for scale or duct-taped?

Use your Certified Buyer Framework to stress-test targets:

1. Financial stability check: verify fintech liabilities.
2. Tech maturity score: measure AI and automation depth.
3. Cash-flow resilience test: simulate 15% revenue decline.

For Sellers: Confidence Isn’t Strategy

Optimism means little without systemization. Use this window to:

1. Document everything — processes, vendor lists, SOPs.
2. Shift short-term fintech debt into longer-term SBA or traditional instruments.
3. Integrate automation where it saves time and increases valuation.
4. Prepare for due diligence early — buyers are becoming more sophisticated thanks to platforms like BusinessOwner.com.

• Key finding: “93% of small businesses expect growth in the next year” from the Enova International / Ocrolus “Small Business Cash Flow Trend Report”.  
• “75% of small businesses are bypassing traditional banks in favor of non-bank/fintech lenders.”  
• On the fintech vs bank lending risks side: “Fintech has improved efficiency … but has also raised concerns about financial stability” from the Center for Economic Policy Research (CEPR) article.  
• Additional note: The Federal Reserve Board “2025 Report on Employer Firms” shows that while many firms applied for financing, traditional bank approval rates and satisfaction at online lenders vary – useful in the risk/financing-depth part.