Step into the typical American small business in July 2022. Cash moves through the register all day. The phone rings with order calls. There is no owned website to speak of, and digital wallets at the counter are the exception. When you ask the owner if the business will still be open in two years, the answer is yes, but with a careful eye on the road ahead.
Step into the same business in February 2026, and nearly everything has changed except the storefront itself. Cash still moves through the register, but less frequently. The owner has built a website that now drives a meaningful share of sales. Customers tap Apple Pay and Venmo at the counter every day. A delivery aggregator that the business had never used before sends orders straight in. Revenue is higher. Confidence is higher. The owner is part of the majority, not an exception.
That before-and-after contrast is the composite picture drawn by the SMB Growth Monitor. Across four years and 23 surveys, PYMNTS Intelligence surveyed U.S. small to mid-sized businesses to offer one of the most detailed pictures available of how they are earning, spending, paying, borrowing and planning.
This report distills what those four years of data reveal. The story is one of steady recovery and meaningful growth, paired with a widening gap between the largest and smallest SMBs. This report walks through what changed, who changed the most, where SMBs are still under pressure and where the next four years of opportunity sit.
Key findings
The majority of SMBs are growing, but the size of the gain depends on the size of the business.
In February 2026, 51% of SMBs reported higher revenue than the prior year, compared with 49% in July 2022. This share has held above 50% for most of the four-year period, peaking at 56% in March 2025 and briefly bottoming at 43% in February 2025. Across all SMBs, revenue grew an average of 8.2% higher than 2020 levels by January 2025, up from 6.5% in April 2024. The catch: Those with more than $1 million in annual revenue grew 13.7% on average, while those with less than $150,000 in annual revenue grew just 0.6%.
The storefront is no longer the only front door.
Sixty-one percent of SMBs still sell through a physical store, but 57% now sell through their own website. That near-tie did not exist at the start of the period. Compared with January 2022, the physical-store share has fallen 6 points, and telephone selling is down 8 points. Among the channels SMBs use, delivery aggregators, social media and owned mobile apps are seeing the strongest sales growth, with each posting double-digit percentage point gains in the share of SMBs that report rising sales through them.
Cash remains widely accepted but is gradually losing ground, while the in-store payment mix continues to evolve.
In-store cash acceptance declined modestly from 87% in January 2022 to 82% in February 2026. At the same time, digital payment methods are gaining traction, with Apple Pay use increasing by 11%. Debit card acceptance also strengthened, climbing from 73% to 79%, matching credit cards, which remain one of the most universally accepted payment methods both in-store (79%) and online (79%).
Capital is roughly half strategy and half necessity, and access to credit is not the leading concern.
Among SMBs seeking outside financing in February 2026, 37% do so as a strategy, 35% out of necessity and 28% for both reasons. The strategy share is down from 44% in April 2024, while the necessity share is up from 30%, but both have stayed within a few points of each other. When asked what would put their survival at risk, just 13% of SMBs cite the inability to secure financing. By comparison, 58% cite poor economic conditions and 38% cite competition from larger chains.
Confidence is near a four-year high, with a 20-point gap based on company size.
Eighty-two percent of SMBs are very or extremely confident they will survive the next two years, up from 78% in July 2022. Confidence has never fallen below three-quarters in any of the 23 surveys. The gap by size is wide and consistent: 73% at businesses with less than $150,000 in revenue, 83% at businesses with revenues between $150,000 and $1 million and 93% at businesses with revenues of more than $1 million. That 20-point spread between the smallest and the largest businesses is the widest single divide anywhere in the four-year dataset.
The Four-Year Story
Here is the same story laid out as before-and-after readings of the metrics the SMB Growth Monitor has tracked over the period.
Across nearly every metric the SMB Growth Monitor tracks, the four-year direction has been positive or stable. The only material movement in the wrong direction is in-store cash acceptance, and that decline reflects modernization rather than weakness. The methods replacing cash, including cards, checks and digital wallets, carry better data and lower handling costs.
Small Businesses Have Grown
Revenue is rising for most
Over the four-year period, the share of SMBs reporting higher revenue has remained at 50% or higher in nearly every survey. February 2026 sits at 51%, two points above the July 2022 baseline of 49%. The high point came in March 2025 at 56%. The low point of 43% in February 2025 was a brief outlier rather than a trend break. Just as importantly, the share of SMBs reporting lower revenue has fallen almost continuously across the period, from 22% in July 2022 to 13% in February 2026.
It’s a picture of a steady operating environment in which most SMBs are growing slightly each year.
How much they grow depends on how big they are
The change in mean revenue from 2020 was added to the SMB Growth Monitor in April 2024. In its first reading, average revenue across all SMBs was 6.5% higher than in 2020. By January 2025, that average climbed to 8.2%.
The headline average, however, hides the most important finding in the four-year dataset. The same survey wave that produced the 8.2% overall average also produced a 13.7% average for businesses with more than $1 million in annual revenue, and a 0.6% average for businesses with less than $150,000 in annual revenue. The largest SMBs grew at nearly 23 times the pace of the smallest. Mid-sized SMBs (between $150,000 and $1 million in annual revenue) sit between the two, closer to the top end than to the bottom. That’s the central tension in the four-year story: The small business economy in aggregate is growing solidly, but most of that growth is concentrated in those with more than $1 million in revenue.
What’s helping and hurting small businesses
In June 2025, the SMB Growth Monitor asked SMBs what was helping and what was hurting their financial health. The five top positive factors and the four top negative factors are summarized below.
The drag story is a cost story. Three of the four top drag factors (cost of goods, labor and supply chain) sit on the cost side of the business. This is a small business economy where revenue is moving in the right direction, and daily work focuses on margin protection.
Technology and Channels Rebuilding Sales
If the growth story is one half of the four-year picture, the rebuilding of how SMBs sell and get paid is the other half. Two parallel shifts stand out: a digital channel mix that now nearly matches the physical store, and an in-store payment mix that looks fundamentally different from where it stood in 2022.
Where small businesses sell
Compared with the January 2022 baseline, the channel mix has rebalanced rather than flipped. The physical store is still the lead channel, but has lost ground. Telephone selling, the most striking decline, dropped 8 points. Social media selling rose, third-party marketplaces ticked up and owned mobile apps held roughly steady.
The most consequential entry on the list is the one without a baseline. Owned website selling joined the SMB Growth Monitor in April 2024, and by February 2026, it had reached 57% of SMBs, within four points of the physical store. Virtual meeting platforms, also added later, now sit alongside owned websites as standard channels. The takeaway is that the typical SMB is now multichannel by default, with a digital storefront living alongside the physical one rather than instead of it.
Where sales are growing fastest
Looking at the share of channel users who report higher sales through that channel sharpens the acceleration story. The base of commerce is still physical, but every category of growth on this list is digital.
There are two readings of this table. First, the highest absolute share of users reporting growth in February 2026 belongs to delivery aggregators (61%) and owned mobile apps (51%). Second, the largest four-year change belongs to social media (+39%) and delivery aggregators (+24%). Whether measured by current strength or by pace of change, the answer is the same: Digital channels are growing. The physical store remains the largest base of SMB selling activity, but it is no longer where the marginal new dollar is generated.
How small businesses accept payments
In February 2026, credit cards dominated both in-store and online channels. Every other method shows noticeable splits by channel. Cash and checks are essentially only available in-store. Apple Pay and Venmo run the opposite way, with online acceptance outpacing in-store levels. Buy now, pay later is rare across the board.
The table highlights a clear channel divide. Credit cards stand out as the only truly universal method, with identical acceptance in-store and online (79%). In contrast, cash and checks remain confined to the physical environment, with no presence online. Digital wallets and peer-to-peer options show the opposite pattern, skewing toward online usage. Apple Pay (32% versus 30%) and Venmo (41% versus 36%) both offered more online. Meanwhile, BNPL remains relatively low across both channels, though slightly more adopted online. Overall, the asymmetry across payment methods underscores where future growth is likely to occur: expanding digital and account-based payments more evenly across channels while gradually reducing reliance on cash and checks in-store.
The four-year shift in the in-store payment mix
In-store payments today look fundamentally different from how they looked in mid-2022. Five methods account for the bulk of the change.
Two trends stand out here. First, cash shows the largest decline, falling 5 percentage points from 87% to 82%, more than any other method in the period. Second, the shift is not driven by a single substitute. Debit card acceptance increased notably from 73% to 79%, while Apple Pay rose more modestly from 27% to 30%. Other methods show limited or no change. Venmo remains flat at 36%, Google Pay is unchanged at 30% and PayPal and checks declined slightly. Overall, the shift away from cash appears gradual and dispersed across multiple payment methods rather than concentrated in one clear replacement.
Small Business Success and Struggle
The four-year dataset is unusually clear about which characteristics travel together. When the major question codes are read side by side (revenue size, channels used, payment acceptance, financing motivation and survival confidence), two recognizable profiles emerge. They are reported here as described in the SMB Growth Monitor data, not as predictions.
Likely to succeed
- Size: More than $1 million in annual revenue. 93% are very or extremely confident of two-year survival in February 2026, the highest reading of any size group.
- Revenue growth: Mean revenue change of 13.7% in January 2025, the highest of any size group and well above the 8.2% average across all SMBs.
- Sales channels: Multichannel by default, including an owned website and a third-party marketplace presence. Owned website selling reached 57% of all SMBs in February 2026, with the largest size group more likely to use it.
- Payments: Most likely to accept cards, ACH payments and digital wallets across both in-store and online channels. The full payment stack, not the minimum viable one.
- Growth drivers: Rising customer demand (40% cite it as a positive factor), reduced operating costs (32%) and stronger marketing (29%) lead the list of forces helping financial health.
Likely to struggle
- Size: $150,000 or less in annual revenue. Only 73% are very or extremely confident of two-year survival in February 2026, a 20-point gap to the largest size group.
- Revenue growth: Mean revenue change of 0.6% in January 2025. Effectively flat, and a fraction of the average across all SMBs.
- Sales channels: A thinner channel mix. The physical store and social media are the dominant selling channels at this size. Owned websites and marketplaces are reached less often.
- Payments: More reliant on cash and checks in-store, with less digital wallet and ACH penetration. Cash acceptance fell from 87% to 82% across all SMBs in the period, but this size group remains overrepresented in the share that remains cash-heavy.
- Top risk: Poor economic conditions lead the list of survival concerns at 58%, more than the next two risks combined. Broader economic pressure bites hardest at the smallest size group.
Survival confidence tracks with revenue size more clearly than with any other cut in the data. The 20-point gap between the largest and smallest SMBs is the widest single divide in the dataset. The gap is wider than any difference across sales channels, payment methods or borrowing motivations. That is why size is the through-line of the four-year story.
Where Small Businesses Are Constrained
The four-year data also makes the pressure points unusually clear. The constraints come in three forms: the size gap, the cost squeeze and the broader economy.
The size gap is the dominant divide
Survival confidence in February 2026 ranges from 73% among SMBs with revenues of less than $150,000 to 83% among those with revenues between $150,000 and $1 million, to 93% among those with more than $1 million in revenue. The same gap shows up in revenue growth (13.7% versus 0.6% in January 2025), channel breadth (the smallest businesses run thinner channel mixes), payment acceptance (the smallest businesses rely more heavily on cash and checks) and in stated risk concerns (the smallest businesses are more worried about broader economic pressure).
None of those gaps resulted from a single year-on-year change. They are persistent features of the SMB Growth Monitor across all 23 surveys. The implication for the year ahead is that the question is less about whether SMBs are growing and more about which ones are. Aggregate readings will remain healthy as long as the largest size group carries them, even if the smallest size group remains roughly flat.
Costs are the most cited drag on financial health
When SMBs were asked in June 2025 what was hurting their financial health, the rising cost of goods or services led the list at 34%, nearly double the next item. Higher labor costs (18%), increased competition (16%) and supply chain disruptions (14%) followed. These are the constraints SMBs face. They coexist with the growth in customer demand rather than offsetting it. The demand environment is real, but the margin environment is being defended one input cost at a time.
The broader economy is the leading survival concern
When asked what would put their survival at risk in February 2026, 58% of SMBs cited poor economic conditions, more than the next two risks combined. Competition from larger chains was the second-most-cited concern at 38%. Inability to secure financing was cited by 13%, a materially lower figure.
The pattern is striking. SMBs worry first about the economy, second about competition and third about credit access. Capital is treated as a constraint, but a mid-tier one. That ordering reframes how to read the rest of the picture. The pressures that bind hardest sit above any single SMB, in macro conditions and competitive structure, rather than in the financing layer.
Where Small Businesses See Opportunities
The four-year data points to four opportunity areas.
Closing the digital channel gap
Fifty-seven percent of SMBs sold through their websites over less than two years of measurement, almost catching up to physical stores at 61%. Among channel users, delivery aggregators (61% reporting growth, +12 points), social media (46%, +13 points) and owned mobile apps (51%, +8 points) post the highest gains. The opportunity is to extend the digital base, not as a replacement for the storefront, but as a second front door that can be stood up at much lower cost than a second physical location. Smaller SMBs, in particular, have room to move here, given how concentrated their channel mix remains in physical stores and social media.
Extending wallets and BNPL across channels
Credit cards already dominate both in-store and online, with equal acceptance (79% in each). The remaining gaps highlight where growth can happen next. Businesses accept Apple Pay and Venmo slightly more online (32% vs. 30% for Apple Pay; 41% vs. 36% for Venmo), while bank account transfers also show stronger adoption online. BNPL remains relatively low but is more common online (13% vs. 8% in-store), pointing to an opportunity to expand in physical retail. With cash declining from 87% to 82% in-store, there is room for new payment methods to grow without displacing established habits.
Treating outside capital as a tool, not a last resort
In February 2026, 37% of SMBs that sought out financing did so as a strategy, and 28% cite both strategy and necessity. Strategic and necessity-driven financing have run roughly even across every survey since the question was added in April 2024, staying within a few points of each other rather than diverging. With credit access cited by only 13% on the survival risk list, the data suggests the binding limit for many SMBs is not the availability of capital but how productively it’s being used. The opportunity for capital providers is to compete on usefulness (embedded financing, working-capital tools tied to invoicing or sales activity, faster turnaround) rather than purely on rate or eligibility.
Pushing the success profile into smaller SMBs
The composite profile of an SMB likely to succeed is consistent across the dataset. These businesses have more than $1 million in revenue, multichannel selling (including an owned website and a marketplace), broad payment acceptance across cards, ACH and wallets in both channels, treat financing as a strategy rather than a backstop and cite customer demand and lower costs as growth drivers. Most components of that profile are not actually size-dependent. An owned website, broader payment acceptance and strategic use of financing are all available for businesses with less than $1 million in revenue. They’re just less common there. The structural opportunity for SMBs, technology providers and capital providers is to push more elements of that profile down into the smaller size groups, where confidence and growth lag the most.
What This Means
For the U.S. economy
The steady majority of SMBs is growing. The share with falling revenue has shrunk meaningfully since 2022 (from 22% to 13%), and confidence has climbed four points to 82%. The 13.7% versus 0.6% gap by size, however, makes clear that the small business recovery is real but uneven. Aggregate readings will keep looking healthy as long as the largest size group carries them. The policy question is what it would take to move the smallest size group closer to the middle.
For the future of commerce
Owned websites have nearly caught up to physical stores in just under two years of measurement (57% versus 61%), and digital channels post the highest sales growth. The default SMB is now multichannel. The marginal new sales dollar lives in delivery aggregators, social media and owned mobile apps.
For payments
In-store cash usage has declined, but only gradually, from 87% to 82% over the period. Credit cards continue to dominate across both channels, with equal acceptance in-store and online (79%). The remaining differences across payment methods point to where growth is likely to come from. Digital wallets and peer-to-peer options are slightly more common online, while bank account transfers also skew toward digital channels. BNPL remains relatively low but shows higher adoption online than in-store. Overall, the opportunity lies in expanding these digital and account-based methods more evenly across channels as reliance on cash continues to ease.
For capital providers
Strategic and necessity borrowing are each roughly one-third of the mix and have run roughly flat since April 2024. With financing access cited by just 13% as a survival risk, capital providers have room to compete on usefulness rather than just availability. Embedded and contextual capital is the natural next frontier.
For small business owners
The success profile is multichannel, multi-payment, strategically financed and seen in businesses with more than $1 million in revenue. Three of those four characteristics are achievable for those with revenues of less than $1 million. Adding an owned website, broadening payment acceptance and treating financing strategically are the cheapest moves on the list and are the ones most strongly associated with confidence and growth in the four-year data.
About the Data
The PYMNTS Intelligence SMB Growth Monitor tracks revenue, sales channels, payments, capital and survival outlook across 23 surveys conducted between July 2022 and February 2026. Each survey draws on a representative sample of U.S. SMBs with annual revenues of up to $10 million. Revenue size (less than $150,000, $150,000 to $1 million, and more than $1 million) is the primary segmentation lens. Comparisons over time pair the most recent reading with the earliest comparable reading for each metric. Every figure cited in this report comes directly from the SMB Growth Monitor source data.
Notes on scope. The revenue magnitude time window is shorter than the revenue direction time window because it was added to the survey in April 2024. Net profit margin levels, explicit credit access barriers and a composite financial health rating are not part of the released SMB Growth Monitor dataset. Percentage-point changes between surveys are reported as PYMNTS Intelligence publishes them. Minor differences from raw subtraction are due to rounding in the underlying figures.
