In June, we observed small businesses pulling back on capital expenditures. The latest NFIB Small Business Economic Trends, a monthly national survey of owners, provides additional insight into this slowdown and what it means for small business expansion.
NFIB asks owners whether the next three months are a good time to expand, and why. Only 12% said yes.
What Is Actually Blocking Small Business Expansion
Among owners who said it was not a good time, 25% cited general economic conditions. The cost of the project itself followed at 8%, the political climate at 6%, and their own sales prospects at 4%. Financing and interest rates ranked second from last at 3%.
The cost of capital has fallen. The average rate a small business borrower paid on a short-term loan was 7.5% in August, down from 9.5% two years ago. Borrowing activity picked up this past July, with owners borrowing mostly on lines of credit, which typically fund operating gaps rather than growth. Credit, when secured, is supporting day-to-day operations, not expansion.
Why This Is Happening Now
Owners are describing the national mood, not conditions inside their own business. Only 4% named their own sales prospects, even though sales across the survey were the weakest since November 2025. The most common answer, general economic conditions, is not a specific obstacle.
That mood is not a passing phase. NFIB’s uncertainty reading has averaged 92 over the past twenty months against a long-run average of 68, and has not returned to that baseline since November 2023. We covered this shift in January, when policy and cost uncertainty replaced inflation as the planning challenge.
What This Means for Your Business
Owners appear to be delaying capital expenditures based on that mood, which shows no near-term signs of improvement. The stronger strategy is to make the decision on your own evidence: what your pipeline holds, what capacity sits idle, what your margins can absorb. Capital readiness is a strategic question, and owners who resolve it early move first.
Our team works with business owners to strengthen strategy, improve financial readiness, and stay lender-ready through shifting conditions.
Whether you’re refining capital allocation priorities, stress-testing scenarios, or preparing your business for the opportunities ahead, we can help develop and implement clear next steps. Schedule a free discovery session.