By Andrew Miller
In an economy marked by rising tariff costs, inflation, and supply chain issues, another challenge for small business owners grows more complex.
It’s getting more expensive to insure employees.
According to the US Chamber of Commerce’s Small Business Index, nearly 1 in 5 small businesses now consider employee benefits and health care costs as a primary challenge. Notably, that’s the highest percentage since tracking began in 2023.
Among the biggest struggles are heightened employee financial stress and growing expectations. Healthcare premiums have increased as much as 25%, quickly becoming a top challenge for companies with fewer than 1,000 employees.
As a result, small businesses aren’t planning on doing much hiring next year. Only 30% plan on increasing staff, down from 42% last quarter.
It makes sense to be cautious. But pulling back on staffing and benefits doesn’t eliminate cost altogether, it just changes the form it takes.
Rising living expenses and medical costs are a major concern for employees too. The pressure is starting to reflect in their overall wellbeing, with less than half reporting feeling holistically healthy. Struggling workers cause a decrease in productivity, service quality, and company growth potential.
On the other hand, it shouldn’t come as a surprise that healthier employees make for healthier companies.
MetLife, one of the largest insurers in the US, estimates a $2.30 return for every $1 invested in employee health. That return comes in the form of gains in productivity, retention, and lower medical spending. Their 2026 US Employee Benefit Trends Study also found that healthy employees were 25% more productive and loyal, while taking 10% fewer sick days.
In this environment, setting aside capital upfront for meaningful employee benefits can create budget complications. But the obstacle is often more solvable than it appears.
An SBA 7(a) loan is one of the most flexible financing tools available to small businesses. Working capital, which includes payroll and benefits, is an explicit approved use of these funds.
Instead of using a loan to cover a slow quarter, business owners can consider funding a benefits package that reduces turnover, improves productivity, and makes it easier to find new talent when ready.
The ceiling most small business owners face isn’t always a fixed issue. Sometimes it’s a capital allocation problem. And capital allocation problems are exactly what Signet Capital Group was built to solve.
If rising benefits costs are holding your business back from the team it needs to grow, let’s talk about how to fund the difference.