On today’s episode of The Small Business Show, Citizens Bank’s Head of Business Banking, Mark Valentino, joins us to break down the most pressing challenges confronting small business owners today. From labor shortages and tariff volatility to capital access and economic resilience, Valentino provided a wide-ranging look at the current small business landscape, while sharing actionable advice for entrepreneurs navigating these uncertain times.
According to Valentino, the labor gap remains the leading concern for small business operators. While the tight job market began during the COVID-19 era, its effects are still lingering. “Small businesses couldn’t compete with the wage growth that was happening,” Valentino said, noting that the struggle to find affordable, qualified labor has only intensified in 2024 and 2025. He added that labor challenges are especially acute in sectors like farming, food service, and landscaping, and that immigration constraints are worsening the issue. “…what’s going on right now with immigration is probably going to be a net loss for small businesses until we figure out how to create more legalized immigration into this country…”
Tariffs are another mounting pressure point. Valentino explained that many small business owners are unprepared for the complexity and speed at which tariffs are changing. “It’s causing massive cash flow disruption,” he said, pointing to industries like apparel, where costs tied to overseas suppliers are rising rapidly. He warned that while some vendors are willing to negotiate, most businesses will inevitably pass those increases on to consumers, potentially cooling demand in the months ahead.
Despite these hurdles, Valentino praised the resilience of the small business sector. “We have some of the most innovative business owners in the world,” he said, crediting them with being able to pivot quickly during disruptions like COVID-19. However, he cautioned that the real test will come in the second half of 2025 as deferred costs from tariffs and inflation begin to show up in company financials.
Access to capital remains another hot topic. While Valentino said Citizens remains committed to lending, he acknowledged that overall loan demand hasn’t returned to pre-pandemic levels. Many small business owners still rely on pandemic-era savings and remain cautious due to elevated interest rates. “The financials don’t look as attractive as they might have one or two years ago,” he said, recommending that businesses secure credit before they need it.
He also emphasized that banks like Citizens are evolving how they evaluate loan applications. Rather than relying solely on tax returns, Citizens also reviews financial statements, cash flow data, and bank activity to assess creditworthiness. Valentino advised business owners to build relationships with their banks and to run their companies with the expectation that they may need financing in the future.
Further, Valentino echoed SBA Administrator Kelly Loeffler’s recent sentiment that now is still a good time to start a small business. “Whenever there’s disruption or confusion, that’s when there are a lot of net winners in the economy,” he said, pointing to historic trends and the growth of the gig economy as evidence.
While the road ahead may be bumpy, Valentino remains optimistic. With the right guidance and financial support, he believes small businesses can continue to adapt, grow, and drive the U.S. economy forward.
“Affordable labor has continued to be kind of the number one pain point for business owners as they think about growth.”
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