A subcategory of business applications called “high-propensity” applications refers to businesses with a high likelihood of having a payroll, meaning the business plans to hire employees and pay wages.
According to Census Bureau data, applications for high-propensity businesses hit highs in 2021 at 1.77 million and again in 2023 at 1.78 million after a down year in 2022. As of October, 1.4 million applications had been submitted in 2024, about 75,000 shy of the year-to-date total in October 2023.
Economic forces like heightened inflation have introduced some volatility to the small business landscape since the pandemic. But in 2024, the numbers of both general and high-propensity applications remain higher than pre-COVID levels.
How do small businesses impact the economy?
Despite the size and impact of the small business sector, data collection around small business activity is limited, according to the Bureau of Economic Analysis.
Large businesses grew faster and accounted for the majority of gross domestic product (GDP) between 1998 and 2014, per a summary of research on small businesses and GDP from the SBA. Small businesses’ share of GDP fell during this time — but they still accounted for 43.5% of economic activity in the US in 2014.
The Congressional Budget Office notes that small businesses also contribute to the economy by driving productivity and generating competitive pressure that forces larger businesses to innovate.
How does the government support small business activity?
The federal government has a history of supporting entrepreneurs to stimulate the small business economy. The SBA is a cabinet-level agency that provides support for small businesses through programs like the Small Business Innovation Research and Small Business Technology Transfer programs, which provide a government-funded seed pool for small businesses and startups.
During the COVID-19 crisis, the American Rescue Plan also provided small businesses with tax credit programs and Paycheck Protection Program loans.
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