Rising costs are continuing to squeeze American wallets — and perhaps nowhere is that more apparent than in the food sector. According to the latest Experian Commercial Pulse Report (October 14, 2025), food prices are having a profound impact on where and how consumers choose to eat. With the Consumer Price Index for food rising 3.2% year-over-year, both full-service and limited-service restaurants are feeling the heat.
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Specifically, Full-Service Restaurant prices have surged 4.6%, while Limited-Service locations have seen more modest increases of 3.2%, the lowest pace in over a year. As price-sensitive consumers pull back on discretionary spending, Experian’s data shows a notable shift toward more affordable dining options—or a return to eating at home.
Credit Demand Is Strong, But Approval May Be Slipping
Even with shifting consumer habits, restaurants are not sitting idle. Experian’s credit data reveals that both Full-Service and Limited-Service Restaurants are actively seeking commercial credit — a likely sign of increased working capital needs in the face of inflation and tighter margins.
However, access to that credit appears to be narrowing.
- Commercial inquiries from Full-Service Restaurants have risen to 1.7x pre-pandemic levels.
- Limited-Service Restaurants follow closely at 1.5x.
- Yet the number of credit-active Limited-Service establishments has declined, suggesting either a slowdown in approvals or reduced eligibility.
This contrast implies that demand for financing is rising faster than approval rates, especially for smaller or newer businesses trying to stay competitive amid rising costs.
Shrinking Credit Limits, Rising Utilization
Restaurants are not only facing tighter access but also leaner terms. Average credit limits for new commercial card accounts have fallen significantly since 2021:
- Full-Service Restaurants: Down from $11,500 to under $6,000
- Limited-Service Restaurants: Also trending downward
- Groceries (used as a benchmark for at-home eating): Down from $13,000 to $9,000
At the same time, credit utilization rates are climbing — an early warning sign that businesses are relying more heavily on revolving credit to manage day-to-day operations.
- Full-Service Restaurants now use 31.9% of available credit, up 4.6 points since 2023.
- Limited-Service Restaurants trail close behind at 31.8%.
- Groceries come in at 28.8%, showing increased pressure even in the at-home dining sector.
Taken together, this combination of lower credit limits and higher utilization points to a tightening credit environment, which may be challenging for restaurants to navigate through the holiday and post-holiday seasons.
Commercial Risk Trends Tell a Mixed Story
One of the more nuanced insights in Experian’s report is how different restaurant types are weathering the current environment from a risk perspective:
- Full-Service Restaurants show only a modest decline in commercial risk scores (–0.8 points), suggesting relative resilience despite financial pressures.
- Limited-Service Restaurants, interestingly, saw a +1.4 point improvement in risk scores—indicating increased stability and better adaptation to current market conditions.
- In contrast, grocery retailers—the benchmark for “eat-at-home” sectors—experienced a -1.8 point drop in their risk scores, highlighting greater strain in that segment.
This divergence reflects a growing consumer shift toward lower-cost food options like quick-service dining, potentially at the expense of both full-service restaurants and grocers.
What It Means for Lenders and Business Strategy
These trends carry significant implications for financial institutions, credit providers, and small business advisors:
- Rising inquiries + shrinking credit limits = greater risk of liquidity stress
- Stronger risk scores for Limited-Service = opportunity for more targeted lending or product offerings
- Elevated utilization rates = need to monitor credit performance closely, especially for revolving credit
For business owners and operators, understanding these dynamics is crucial to building resilience in a volatile market. Strategic decisions around financing, menu pricing, staffing, and technology adoption will likely make or break performance through the next few quarters.
Conclusion: A Sector Under Pressure — but not out
While economic headwinds persist, the restaurant industry shows remarkable adaptability. Whether it’s shifting toward leaner operations, targeting lower-income consumers, or increasing credit usage to bridge cash flow gaps, the sector is evolving in real-time.
As always, Experian’s insights provide a critical lens into these movements—helping lenders, business leaders, and policymakers make smarter decisions amid uncertainty.
For the full analysis, including all small business credit trends, read the latest Experian Commercial Pulse Report.
- ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis.
- ✔ Subscribe to our YouTube channel for regular updates on small business trends.
- ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow.
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The U.S. small business landscape is undergoing a structural transformation — and commercial lenders may need to rethink what a “small business borrower” looks like. According to Experian’s May 26th, 2026 Commercial Pulse Report, new business formations remain at historically elevated levels, averaging approximately 450,000 per month since the pandemic. That pace represents a 54% increase compared to pre-pandemic averages from 2018 and 2019. Watch the Commercial Pulse Update According to Experian’s latest Commercial Pulse Report, new business formations remain at historically elevated levels, averaging approximately 450,000 per month since the pandemic. That pace represents a 54% increase compared to pre-pandemic averages from 2018 and 2019. But perhaps more importantly, the composition of those businesses has changed dramatically. In early 2026, approximately 93% of newly formed businesses were sole proprietorships, up from 85% in 2018. Many of these businesses have no employees, limited operating history, and different borrowing behaviors than the traditional small businesses lenders historically underwrote. That shift is creating a fundamentally different commercial credit environment. A Different Kind of Small Business Owner Historically, many small business lending models were designed around businesses with employees, established operations, recurring revenue streams, and longer credit histories. Today’s wave of new businesses often looks very different. Many newer firms are being launched by individuals pursuing consulting work, freelance opportunities, side businesses, creator-economy income streams, or post-retirement self-employment. These businesses may operate leaner, carry lower fixed costs, and rely more heavily on revolving credit products rather than traditional financing structures. In many cases, the business owner and the business itself are financially intertwined. That evolution matters because underwriting a sole proprietor is not the same as underwriting a mature operating company. The rise in sole proprietorships is being driven by several long-term labor force and demographic trends now reshaping the U.S. economy. Demographic Shifts Are Driving Entrepreneurship One of the most important forces behind the surge in sole proprietorships is the aging U.S. population. By 2050, individuals aged 55 and older are projected to represent nearly 40% of the total U.S. population. At the same time, Americans are increasingly working later in life. Labor force participation among older workers has steadily increased over the past two decades, while participation among younger workers has trended lower. Retirement itself is also evolving. Many retirees are no longer fully exiting the workforce. Instead, they are remaining economically active through part-time consulting, contract work, side businesses, and self-employment arrangements. According to research highlighted in Experian’s report, 59% of workers expect to continue working during retirement, while 61% of recent retirees express interest in continued employment. These trends are contributing to a growing segment of “microbusinesses” — businesses with few or no employees operating primarily around the skills, experience, or services of an individual owner. At the same time, broader workplace dynamics are also influencing entrepreneurial activity. Employee Engagement Is Falling According to Gallup, employee engagement in the U.S. and Canada declined to 31% in 2025, down from post-pandemic highs. Gallup estimates that low engagement costs the global economy nearly $10 trillion in lost productivity. Younger workers in particular appear increasingly affected by workplace stress, burnout, and changing expectations around flexibility and career mobility. As a result, more individuals may be pursuing alternative work arrangements, independent income streams, or self-employment opportunities. The side-hustle economy continues to expand as well. A recent PYMNTS study found that nearly 20% of workers engaged in regular side work during the previous six months. Collectively, these labor force dynamics are reshaping not only how Americans work, but also how small businesses are formed, financed, and evaluated from a credit perspective. Commercial Credit Usage Looks Different Experian data shows meaningful differences in how smaller and larger businesses use commercial credit. Smaller businesses and sole proprietors rely more heavily on commercial credit cards, while larger firms tend to utilize a broader mix of leases, lines of credit, and term loans. Businesses with four or fewer employees received average commercial card credit lines of roughly $8,900 in 2025. By comparison, businesses with more than 100 employees averaged approximately $29,500 in new commercial card credit lines. Even when loan origination rates appear similar across business sizes, loan amounts differ substantially. Businesses with fewer than four employees averaged approximately $119,000 in term loan originations, while larger businesses averaged closer to $268,000. Risk performance differs as well. Larger firms generally continue to demonstrate lower delinquency rates and stronger commercial credit scores, reflecting greater operational scale, more established financial histories, and broader access to capital. Why Risk Models May Need to Evolve For lenders, these shifts present both opportunity and complexity. The surge in new business formation creates potential growth opportunities across commercial credit markets. However, many of today’s borrowers may not fit historical underwriting assumptions. Traditional business risk models often relied heavily on factors associated with mature operating businesses — payroll size, years in business, trade depth, and established commercial borrowing history. Today’s newer firms may instead require a more blended view of risk that incorporates both commercial and consumer-level behaviors, cash flow dynamics, and alternative indicators of financial stability. As sole proprietors and microbusinesses continue to account for a growing share of the small business economy, lenders may need to remain agile in balancing portfolio growth with disciplined underwriting and risk management strategies. The definition of “small business” is evolving — and commercial risk models may need to evolve alongside it. Learn more ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts
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