IT Strategy

Small business profitability is growing again — what it tells you

For the first time since the start of the year, small business profitability growth turned positive in June. But the reason behind the number matters more than the celebration.

August 14, 2026|5 min read

Small business profitability is growing again

The number that flew under the radar amid all the AI news

While tech headlines were pointed elsewhere, the Bank of America Institute's July 2026 Small Business Checkpoint reported that small business profitability growth turned positive in June — for the first time since the start of the year. The same report shows hiring also improved in June compared to earlier months in 2026, with finance, insurance, and real estate firms leading the way.

It's not a huge number, but it's the first sign of a turn after months of pressure.

The reason behind the number matters more than the number itself

The same report shows small business owners have been planning price increases for over six years, because revenue growth hasn't kept up with rising operating costs. In other words: improving profitability doesn't necessarily mean it got easier to sell. It might mean businesses finally adjusted prices, cut costs, or both — after holding off for a long time.

Small business loan rates remain high by historical standards, even after declining from their 2022 peak, and loan payment amounts per small business client have increased — a sign that whoever took on credit is paying more for it. Celebrating the number without understanding this part is celebrating too soon.

What to do with this information, in practice

Three questions help translate this macro data into your own business: did your margin improve because you adjusted prices recently, or because costs fell — and do those two causes call for different decisions going forward? If you're considering taking on credit now, is the loan cost already priced into what you charge, or will it eat the margin that just improved? And if hiring is improving in your sector, is that a sign that competing for talent will get more expensive soon?

Where Diglion comes in

Diglion helps small and mid-sized businesses understand what's actually behind their own margin — price, cost, or both — before making an investment or credit decision based only on the feeling that "things are improving."