Most US small business owners plan to apply for credit, but few turn to banks for financial advice
According to TD Bank’s inaugural Financial Preparedness Survey: Small Business Owners' Report, 94 percent of small business owners (SBOs) in the US believe their business is financially prepared for the next 12 to 18 months.
However, the report also reveals potential fragility beneath this confidence. Nearly three-fourths (72 percent) of respondents said they could only withstand revenue shortfalls for two quarters or less before becoming concerned.
Moreover, 43 percent of SBOs stated their business would not survive if they experienced a revenue decline for three to four quarters.
Despite these vulnerabilities, financial preparedness remains a top priority for SBOs. The survey found that 99 percent of respondents assess their financial preparedness quarterly or more frequently.
Among indicators of readiness, 52 percent cited positive cash flow, while 37 percent identified having sufficient capital to handle emergencies.
Andy Bregenzer, co-head of US Commercial Banking at TD Bank, said it is critical for business owners to be financially prepared, especially in today’s environment.
He emphasized that “business owners who invest the time to create a financial plan will be better positioned to face challenges and seize new opportunities.”
Financial preparedness, he added, is not just about survival but also about “positioning your business to grow with confidence no matter what the future holds.”
Over the next 18 months, 82 percent of SBOs said they are likely to apply for a loan or line of credit.
Their top priorities include maintaining company operations (38 percent), implementing major financial technology upgrades (33 percent), expanding into new market verticals (33 percent), and making payroll (32 percent).
The majority (87 percent) expressed confidence in having their applications approved.
When it comes to financial advice, SBOs are divided on where to turn. While 45 percent consult other small business owners and 30 percent use generative AI tools such as ChatGPT, only 46 percent rely on banking or financial partners.
Bregenzer stated that small business owners don’t have to face challenges alone. He noted that “bankers are true small business experts – we've seen it all, and we know how to help.”
He added that SBOs who try to manage everything on their own may be “leaving good advice – and potential opportunities – on the table.”
Bregenzer added that despite ongoing concerns about the economy, interest rates, and inflation, small business owners continue to show resilience.
He said “SBOs are optimistic about their success, they work hard for it, and they deserve a trusted banker who will navigate uncertainty alongside them.”
