Inflation is currently impacting 88 percent of small and mid-sized businesses across the United States, consistent with last year, according to a new report from Bank of America.

The 2025 Business Owner Report, published by the Bank of America Institute on Tuesday, showed that among those affected, 64 percent are raising prices of goods and services, while 39 percent are reevaluating cash flow and spending for the year ahead.

Over the past 12 months, 77 percent of business owners said their costs had increased, with an average cost increase of 18 percent, it said.

Inflation also topped the list of worries for the coming year. Seventy percent of business owners cited inflation as a leading concern for the next 12 months, ahead of tariff policy and the U.S. political environment, both at 64 percent, and interest rates at 58 percent, according to the report.

Despite these headwinds, many entrepreneurs remained cautiously optimistic, with 74 percent of business owners expecting revenue increases in the next 12 months, down from 78 percent in 2024, said the report.