By: Maria Verna, Strategic Product Manager
According to the U.S. Chamber of Commerce, there are 33.2 million small businesses in the United States, with more than five million of those being new businesses that started in 2023. While these businesses may be small, their economic impact is anything but – small businesses support 46% of America’s private sector jobs and account for 44% of the gross domestic product (GDP).
Financial institutions are a key player when it comes to helping local entrepreneurs fuel their small business growth. By engaging with their business clients to ensure they are equipped with the essential tools and products needed to manage their finances, financial institutions can help keep small businesses flourishing, contributing to job creation, economic development and community prosperity.
Here are some things financial institutions can do to support their small business clients throughout the year:
- Encourage Responsible Cash Flow. Because financial institutions work so closely with their business clients, it’s essential to understand the nuances of the business. Understanding how a business works can help position your financial institution to better analyze its cash flow — so you’re prepared to identify areas for improvement.If the analysis reveals a cash flow gap, be prepared to suggest possible lending solutions, including business credit cards, lines of credit or other types of loans. Consider offering loyal business customers a credit line increase on their business cards. You can also help your business clients responsibly manage cash flow by providing them with the tools they need to easily collect, view, manage and monitor their finances – tools like an expense management solution and an administrative tool with easy-to-set-up employee card controls.
- Keep Business and Personal Separate. It’s important for business owners to keep their business and personal expenses separate. Keeping separate lines of credit for personal and business finances helps business owners maintain financial health — so as not to risk maxing out or defaulting on a personal credit card, as well as allowing for easier cash flow monitoring. Additionally, mixing personal and business finances can complicate the tracking of expenses for tax deductions. Keeping business accounts separate makes it easier at tax time and decreases the risk of complicated audits.
- Support Local – Shop Local. Supporting your small business clients doesn’t have to stop at the end of the business day. Small businesses make up the fabric of your community and fuel the local economy. Whenever possible, seek out local organizations to support, like restaurants, coffee shops, garden centers, home improvement stores, jewelers, repair shops – the list goes on. Consider partnering with small businesses on various charitable endeavors as well. By doing so, you are not just supporting local businesses, but also contributing to the prosperity of your community.
With unwavering determination and passion, small business owners are leveraging innovative technology and cutting-edge tools to expand, enhance and ensure the success of their businesses. Your financial institution can be a valuable partner in their small business success story.
Not sure how to best reach and help the small businesses in your community? Consider partnering with a fintech like Primax that offers small business solutions that can help you meet the needs of the small business owners in your community. The future for small business is bright – and your financial institution can help amplify it!
Maria Verna is a Strategic Product Manager for the Business Card Solutions program at Primax. With over 10 years of experience in financial services, Maria is passionate about servicing Small- and Medium-Sized Businesses (SMBs), the backbone of the U.S. economy, by developing lending and payment solutions to meet SMBs’ financial needs. Before joining the strategic product team in 2023, Maria successfully led the Proprietary Small Business credit card portfolio at Citi for over eight years.
