Why Business Owners Are Borrowing Differently in 2026
Why a business owner seeks financing says almost as much about the state of the small business economy as whether they seek it at all. Our 2026 Annual Business Insights Report found a real shift in motivation compared to a year earlier, one that points toward a more defensive posture even as overall optimism holds up.
Business expansion remains the single most common reason business owners say they'd borrow, cited by 45%. But that figure is down 7 percentage points from the year before, when it stood at 52%. At the same time, refinancing existing debt has climbed to 42%, up 6 points year over year, and seasonal cash flow needs entered the list for the first time in 2026 at 41%.
Put together, growth-driven borrowing is losing ground to borrowing aimed at managing existing obligations and smoothing out cash flow timing. That's not a story of business owners giving up on growth. Revenue growth expectations for 2026 remain high, 76% of business owners expected growth at the start of the year, and 75% now say they're meeting or exceeding that plan at the midpoint. It's a story of business owners using financing more deliberately: not only to fund the next expansion, but to manage the obligations and timing gaps that come with running a business through a year like this one.
Other motivations round out the picture. 28% cite an unexpected expense, 24% cite inventory purchases, and 17% each cite staffing needs and building emergency funds. Marketing efforts sit at 15%, inflation specifically at 11%. Technology upgrades and tariffs each sit at just 5%, and AI investment specifically at 2%, the least common reason given, a useful reminder that even as AI adoption grows, most business owners aren't yet financing it directly.
If refinancing or smoothing out a seasonal cash flow gap is why you're considering financing this year rather than funding an expansion, you're not alone, and it's not a sign you're falling behind. You're managing a more complicated set of obligations than a year ago, and financing is one of the tools available for doing that, exactly as legitimate a reason to borrow as growth.
Findings are drawn from Fora Financial's 2026 Annual Business Insights Report, fielded in February and March 2026 among a screened sample of 300-plus U.S. business owners.
Since 2008, Fora Financial has distributed $5 billion to 55,000 businesses. Click here or call (877) 419-3568 for more information on how Fora Financial's working capital solutions can help your business thrive.
