I hope everyone enjoyed the long weekend who had it – I know it was both US and UK listeners on this one.
A new report from OnDeck, in collaboration with Ocrolus, reveals that 93% of small business owners anticipate either significant or moderate growth in 2025, despite facing economic uncertainties and potential tariff changes. This reflects a slight decline from 94% in the previous quarter, indicating a cautious optimism among small businesses. The report highlights that over half of the surveyed businesses, specifically 55%, have already taken precautionary measures to prepare for potential disruptions, such as increasing inventory and securing additional capital. Furthermore, a notable shift in lending preferences is observed, with 76% of businesses now opting for non-bank lenders, reaching a new high in the survey’s history. The findings are based on responses from 437 small businesses and reflect a growing trend towards digital transformation, with 69% reporting frequent use of artificial intelligence tools in marketing tasks. The full report is accessible through OnDeck’s website.
The latest report from the Bank of America Institute indicates a mixed outlook for small businesses, highlighting sector-specific trends in inventory management and hiring activity. While small businesses are generally not increasing their inventory levels, firms in the manufacturing and services sectors are ramping up spending to stock up in anticipation of potential disruptions. According to the report, a net negative four percent of business owners plan to invest in inventory in the coming months, contrasting with a six percent increase in hiring payments above 2019 levels. However, this increase may reflect difficulties in filling roles, as 34 percent of small business owners reported unfilled job openings in April, the lowest figure since January 2021. Payroll growth showed a year-over-year increase of 5.3 percent in April, but a three-month moving average indicates only a 0.9 percent rise, revealing regional disparities in employment trends across the country.
Small to medium-sized businesses are facing significant challenges in adopting artificial intelligence, according to a recent report by Section School. The AI Proficiency Report indicates that 20 percent of employees in companies with fewer than 500 workers rarely or never use AI, and only 16 percent utilize it daily. Justin Massa, an AI consultant, highlights four key barriers to AI effectiveness in these organizations: a lack of understanding among leadership about AI’s capabilities, limited usage to basic functions, a belief that AI will not transform their own work, and the prevalence of “shadow AI,” where employees use AI tools without official approval.
And some tariff impacts. Lenovo has reported a dramatic 64% drop in profits for the fourth quarter, attributing some of the losses to tariffs imposed by the United States. The company’s net income fell to $90 million, down from $248 million a year earlier, while revenue increased by 23% during the same period. Lenovo’s CEO, Yang Yuanqing, stated that the 20% tariffs, which were implemented suddenly, significantly impacted their financial results. Despite these challenges, Lenovo remains the world’s largest personal computer manufacturer, accounting for nearly 25% of global sales in the first quarter of the year. Furthermore, the company highlighted a second consecutive quarter of profitability for its Infrastructure Solutions Group, with revenue growth of 63% year-on-year.
President Trump spent the last few days escalating tariffs again, with a new threat to impose a minimum 25 percent tariff on Apple if the company does not relocate its manufacturing to the United States. Additionally, Trump’s made comments about a possible 50 percent import duty on European goods.
Why do we care?
This week’s convergence of reports delivers a telling snapshot of the SMB landscape—broadly optimistic on growth, increasingly adaptive with capital and supply chain decisions, but still struggling with the realities of AI integration and geopolitical instability.
OnDeck’s finding that 93% of small businesses expect growth in 2025 sounds bullish—until you compare it to last quarter’s 94% and consider that over half are already bracing for disruption. The headline confidence masks a more nuanced readiness posture: stockpiling inventory, tapping non-bank lending, and buffering against volatility. This is not unbridled expansion—this is defensive maneuvering.
The Section School report throws cold water on the AI narrative. While OnDeck cites 69% using AI for marketing, we must ask: is this meaningful use, or is it checkbox adoption? The Section report suggests it’s the latter—shadow AI, limited understanding, and underutilization dominate.
SMBs aren’t sitting still, but they’re also not sprinting ahead. For IT service firms, the opportunity lies in becoming enablers of informed, measured growth—and the buffer against the chaos of macro policy shifts, tech confusion, and market noise.