As 2025 closed, a notable change emerged in the small business landscape: confidence returned even as borrowing costs remained elevated. While the Federal Reserve cut rates three times in the second half of the year, long-term rates failed to follow, keeping capital costs higher than many expected. Yet businesses moved forward anyway—turning improved sentiment into action during the holiday season and laying plans for growth in early 2026. Early 2026 data suggests those businesses read the economy correctly.