Bank of America executive Sharon Miller says small and mid-sized businesses are staying upbeat about the year ahead, even as they face higher costs and tighter margins. Speaking on The Claman Countdown, Miller, the bank’s Business Banking President and Co-Head, outlined how owners are preparing for 2026 and why sentiment remains firm across many sectors. Her comments arrive as companies continue to juggle wages, borrowing costs, and insurance premiums.
The discussion focused on how firms are managing expenses and planning investments. It also looked at where they see demand holding up. Owners are weighing near-term pressures against a longer view of growth, hiring, and innovation.
Costs Are Still High, But Plans Move Forward
Business owners report that expenses remain a top concern. Pay has risen to attract and keep workers. Borrowing costs have increased after years of low interest rates. Insurance and logistics are also more expensive than before the pandemic.
The conversation centered on “small and mid-sized business costs and the optimism these companies have going into 2026.”
Even so, Miller indicated that many clients are not pulling back. Instead, they are shifting spending to projects that bring faster returns. That includes sales tools, digital payments, and warehouse upgrades that reduce waste.
- Labor remains the largest line item for many firms.
- Financing is available, but owners are choosier about terms.
- Supply chains are more stable, yet shipping and storage fees are still elevated.
Why Confidence Endures
Business optimism often reflects what owners see from their own customers. Many report steady orders and healthier backlogs than a year ago. Activity in services, construction, and local retail continues to support hiring and equipment purchases.
Miller pointed to resilience built over recent years. Firms adapted to shocks, found new suppliers, and adopted online tools. Those changes help them handle cost swings today. Owners also tend to think in multi-year cycles. They plan for growth even when the near-term picture is mixed.
Another factor is cash management. Some firms built savings during stronger months. That cushion supports inventory buys and payroll through slower periods. It also gives owners more confidence to commit to 2026 budgets.
Risks That Could Test Sentiment
Optimism is not uniform. Manufacturers tied to interest-sensitive markets remain cautious. Real estate and housing-adjacent trades could pause projects if rates stay high. Restaurants and hospitality keep a close eye on consumer spending.
Hiring is a swing factor. If wage inflation cools, staffing plans could expand. If health and liability insurance rise again, owners may delay new locations or shift to contract labor. Credit conditions also matter. Tighter standards can slow equipment purchases and inventory builds.
Policy uncertainty is another wildcard. Changes in taxes, tariffs, or permitting can alter plans with little warning. Many owners now model best-, base-, and worst-case scenarios before committing capital.
What Owners Are Doing Now
While waiting for clearer signals, companies are making targeted moves:
- Refinancing variable-rate debt into fixed terms when feasible.
- Automating repetitive tasks to reduce overtime.
- Renegotiating supplier contracts and freight lanes.
- Investing in energy efficiency to cut utility bills.
These steps help protect margins without freezing growth. Miller’s comments suggest that banks see steady demand for treasury services, credit lines, and payments tools that support these efforts.
Outlook for 2026
Owners appear set to keep investing, but with stricter return hurdles. Demand in core categories looks steady. Capital projects will favor productivity and customer acquisition. If rates ease and input costs stabilize, hiring could pick up and expansions could return.
If costs rise again, firms may lean harder on pricing power and efficiency. The balance between staffing and automation will be central. Access to credit will also shape the pace of growth.
Miller’s message was clear: cost pressure is real, yet confidence has not cracked. Small and mid-sized firms remain focused on execution, cash flow, and near-term wins that set them up for 2026.
Bottom line: many owners are preparing for growth while guarding margins. Watch labor costs, insurance renewals, and lending standards in the months ahead. Those signals will show whether today’s optimism translates into stronger hiring, new investment, and faster sales as 2026 approaches.
