Small Business 2019 Outlook

Optimism remains high, but labor shortages and health care costs will continue to challenge small business owners in the new year.

Ali Hardy Dec 11, 2018

Many small businesses across the nation experienced big wins this year. Economic conditions throughout 2018 remained favorable, with numerous small business owners reporting record profits. So as we look ahead to a new financial year, what can we expect from 2019?

Optimism high, but challenges ahead

According to the NFIB Small Business Optimism Index, small business optimism continues to enjoy record highs. Heading into the new year, data indicate that small business owners currently have plans to expand, invest in more inventory, and are reporting high sales.

October marked 97 consecutive months of national employment growth, according to the latest jobs report. The U.S. unemployment rate is currently at a 49-year low of 3.7 percent. Although this signals good news for job creation, 88 percent of all small business owners reported few or no qualified applicants for open jobs, according to a recent NFIB report. Labor demand continues to be a top concern and will likely be one of the biggest challenges for small businesses in 2019.

Labor shortages won’t be the only challenge that small business owners face next year. The cost of employer healthcare coverage has increased steadily over the past decade and is anticipated to increase by 4 percent in 2019.

According to the Mercer National Survey of Employer-Sponsored Health Plans, small businesses (organizations with 10 to 499 employees) experience higher costs when insuring their employees compared to larger companies. In 2018, the average per-employee cost of healthcare was more than $12,000 for small businesses. 

SBA announces changes to fee structure

Whether your small business is planning to expand or preparing to take on new challenges in the new year, you may be considering a small business loan. You can compare U.S. Small Business Administration loan rates, amounts, and repayment terms with this SBA loan comparison table.

If you’re interested in an SBA loan, bear in mind that 2019 brings a few changes. Earlier this summer, the SBA announced new business loan fees for its 7(a) and 504 loan programs that became effective Oct. 1, 2018, for the 2019 fiscal year.

The SBA is also offering some fee relief:

  • Loans of $150,000 or less located in an SBA rural area or HUBZone will receive an SBA upfront guaranty fee of 0.6667 percent of the guaranteed portion and no annual service fee.
  • SBA Express loans made to veteran-owned small businesses will receive an SBA upfront guaranty fee of 0 percent and no annual service fee.

As the top 7(a) SBA lender for 25 years in Utah and for 17 years in Idaho, Zions Bank’s team of experts can help you find the right SBA loan for your small business. Apply online any time or visit your local Zions Bank branch.

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