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Future of Small Business Banking in the United States 2022: Getting Big on Small Business Banking

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  • 20 Pages
  • September 2022
  • Region: United States
  • Arizent
  • ID: 5715067
Often thought of as “just” the local restaurant on the corner or the auto mechanic down the street, it’s easy to understand why small businesses get overlooked by the financial services industry. The reality is that small business can be a BIG OPPORTUNITY - you only need to understand what they require to take advantage.

According to the Small Business Administration, there are 31.7 million small businesses in the U.S., of which 25.7 million are sole proprietorships and 6 million have up to 500 employees. Since 2000, small businesses have been responsible for more than 65% of net new jobs created and employ almost half of all U.S. employees.

Prior to COVID, on average about one million new small businesses were launched annually, with a survival rate of about 50% after five years. Today, in large part due to the Great Resignation, technology services provider Intuit QuickBooks is predicting that 17 million new small businesses will be created in 2022, of which 5.6 million will be employer firms hiring staff.

Based on our research, small businesses are optimistic about the future, profitable and investing in technology. They’re highly focused on growing their customer bases while reducing costs and fighting inflation. What do they want from financial institutions (FIs)? While products adopted do vary based on size, small businesses want their primary banking provider to deliver on five key areas in order to earn their business. Small businesses are loyal to their FIs with long relationship tenures and provide clear paths to grow relationships.

So how are FIs delivering satisfaction on those key factors? They’re currently running at a level of roughly 50-60% of small businesses being “very satisfied,” opening the door to competitive FIs, and startups, interested in building a small business banking portfolio.

Table of Contents

  • Introduction
  • Key Findings
  • About this report
  • Small Business Outlook
  • State of Small Business Banking Today
  • Small Business Banking Product Usage
  • Small Business Banking Usage Behaviors
  • Business Banking Satisfaction and Performance Gaps