Business Pulse Report: Four in Ten Small Businesses Now Expect to Fall Short of Their Financial Goals This Year, and That Number Is Climbing

Four in ten might be shocking. But that's not a guess. It's what small business owners themselves are telling researchers right now.

Live Oak Bank's Q3 2026 BusinessPulse report asked hundreds of small businesses (companies making $100K to $10MM a year) how they think this year will go. 41% said they expect to miss their money goals. That's up from 31% just last quarter. And this number has been going up most of the year.

Here's what's causing it, and what it means for how you spend your marketing money for the rest of the year.

Things got harder for small businesses this quarter.

More small businesses said their finances got worse than said they got better. Sales went down. Profits went down. And the money businesses had saved up on top of their normal cash took the biggest hit of anything in the report. It dropped fast, and it's now at its lowest point since early 2025.

Two things are worrying business owners the most. First, the cost of running a business. 76% say this is their top worry, up from 60% a year ago. Second, fewer customers buying. 51% are worried about this now, more than double what it was a year ago. So it's not just that things cost more. Owners are also scared customers might stop showing up.

Bigger companies are having a better year.

Companies that make $10MM to $500MM a year are actually doing better. More of them say their finances improved than got worse, and that number jumped compared to last quarter. Why? More sales. They're worried about the same rising costs (75% say it's their top concern), but they kept growing anyway instead of pulling back.

Here's what this means if you own a small business.

When money feels tight and 4 out of 10 businesses expect to fall short, the first instinct is to cut anything that doesn't bring in cash right this second. Marketing is usually the first thing to go. That makes sense on the surface. But it's usually the wrong move.

Marketing is the thing that brings in customers. If you're worried about not having enough customers, cutting the thing that finds you customers usually makes next quarter worse, not better. The smarter move is to spend smarter, not spend less. Keep doing what's already working. Cut what isn't bringing in leads or sales. Make sure every dollar you spend, you can point to and say "this brought me a customer."

Here's some proof this works: more small businesses applied for extra credit or loans this quarter than last quarter. It almost doubled, from 13% to 24%. And the two biggest reasons they wanted that money? Working capital and growing the business. So businesses aren't just hiding and waiting it out. A lot of them are borrowing money so they can keep moving forward.

The bottom line: costs aren't going down anytime soon, and neither is the worry about customers. But the small businesses that use this moment to get smarter with their marketing, instead of cutting it, are the ones who'll end up looking like those bigger companies next quarter instead of one of the four in ten falling short.

If you're a small business owner and some of this sounds familiar, I'd love to talk. Let's find where I can help you add growth back into your business. Feel free to reach out.