News Summary
Birmingham and Tuscaloosa have emerged as leaders in small business growth, outpacing larger cities, according to a new analysis. The report reveals significant increases in business-to-business payments, with Birmingham experiencing an 84% rise since 2020. This growth is linked to population influx, favorable business conditions, and strong community support initiatives. As a result, both cities are becoming increasingly attractive for new businesses and residents alike, marking a significant turn for Alabama’s economy.
Alabama’s cities, Birmingham and Tuscaloosa, have emerged as significant players in the booming landscape of small business activity, according to a new analysis by BILL, a fintech platform. The report highlights that both cities rank among the fastest-growing in the United States for small business activity as of 2025, noting remarkable increases in recent years.
The analysis specifically examines business-to-business (B2B) payments made by companies with 2 to 200 employees across the largest 342 U.S. cities with populations surpassing 100,000. Notably, the findings indicate that mid-sized cities like Birmingham and Tuscaloosa are outperforming larger metropolitan areas in terms of growth in small business activity.
Key Findings of the Analysis
According to the analysis, the Southern and Western regions of the U.S. have seen the most substantial growth in B2B payments, with the South leading this trend. A staggering 2 million people have migrated to the South from other parts of the country, making it the most attractive region for newcomers. In fact, in 2022 alone, 904,000 of the 2.1 million immigrants settled in Southern states.
This influx of population is primarily attributed to several favorable factors, including a mild climate, business-friendly governments, the availability of affordable housing, and the rise of remote work opportunities.
Birmingham specifically recorded an extraordinary 84% increase in B2B payments since March 2020, with an even more impressive 131% rise noted in the last year. Other cities in Alabama are also witnessing significant growth in this area:
- Mobile: reported a 437% increase in B2B payments since March 2020.
- Montgomery: experienced a 50% growth since 2020.
- Huntsville: saw a 128% increase since the pandemic’s onset.
Impact on Small and Mid-sized Businesses
The study emphasizes the critical role that small and mid-sized businesses (SMBs) play in community development and overall economic health. Birmingham and Tuscaloosa have both made a notable return to the rankings of the top 25 cities for small businesses, a first occurrence since 2020. This surge in small business activity is largely linked to an increase in the local population and elevated community spending.
Several industries are contributing to the growth of SMBs in these cities, notably healthcare and manufacturing. This trend is being further supported by initiatives such as the Birmingham Business Alliance (BBA), which is currently offering a free 12-week Small Business Intensive program aimed at fostering local business success.
Attractiveness of Birmingham and Tuscaloosa
Several characteristics make Birmingham and Tuscaloosa appealing to new businesses and residents alike. These include pleasant weather, strong educational institutions, safe neighborhoods, adequate infrastructure, and a lower cost of living compared to larger urban areas. With such favorable conditions, it’s no wonder that Birmingham and Tuscaloosa are seeing remarkable growth and thriving small business environments.
As the trend continues, Alabama’s mid-sized cities are likely to remain at the forefront of small business growth in the U.S., contributing significantly to the state’s economic future.
Deeper Dive: News & Info About This Topic
- AL.com: Fastest Growing Cities
- Wikipedia: Small Business
- The Bama Buzz: Top 25 Small Business Growth
- Google Search: Small Business Growth Alabama
- Bham Now: Birmingham Small Business Success
- Google Scholar: Alabama Economic Growth
- Montgomery Advertiser: Top 25 Cities
- Encyclopedia Britannica: Business
- Birmingham Times: Capital Access for Small Businesses
- Google News: Birmingham Business Growth
Author: STAFF HERE BIRMINGHAM WRITER
The BIRMINGHAM STAFF WRITER represents the experienced team at HEREBirmingham.com, your go-to source for actionable local news and information in Birmingham, Jefferson County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Sidewalk Film Festival, Sloss Music & Arts Festival, Magic City Classic, and civil rights commemorations. Our coverage extends to key organizations like the Birmingham Business Alliance and the Birmingham Civil Rights Institute, plus leading businesses in healthcare, finance, and manufacturing that power the local economy such as UAB Medicine, Regions Bank, and Encompass Health. As part of the broader HERE network, including HEREHuntsville.com, we provide comprehensive, credible insights into Alabama's dynamic landscape.
