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Often the first to feel the effects of inflation and economic volatility, small business owners are optimistic about their businesses, even as economic challenges remain. KeyBank’s 2024 Small Business Survey found that 65% of small business owners feel confident they could fund their operating expenses for one month with their cash reserves, if an unexpected need arose.
Still, 37% of business owners anticipate that inflation will slightly increase their operating costs and 27% expect a significant increase in operating costs in the next 12 months. The top challenges small business owners anticipate this year are fluctuating sales/revenue (35%), delayed payments from clients/customers (29%) and high overhead costs (28%).
Despite these concerns, small business owners are well-adjusted and taking precautionary measures to protect their businesses—and the employees and communities they serve. They are already implementing cost-cutting measures (32%), increasing cash reserves (30%) and exploring alternative financing options (22%). As one of the top indicators of financial resilience in the US, their actions could be the first signal of an improving economic environment.
“Small businesses are the cornerstone of our communities. They create jobs, fuel the local economy, and help contribute to the character of the neighborhoods we live and work in,” said Mike Walters, President of Business Banking at KeyBank. “By fostering a supportive environment for small businesses, we’re able to invest in and empower entrepreneurs, increase their confidence and help their business run better.”
Leaders Leverage Bank Relationships for Education and Resources
Banks are at a pivotal moment to help their small business clients navigate cash flow and business operation concerns—and small business owners are turning to them for advice. The top three pieces of advice owners have received are: cut costs by reducing discretionary spending (34%), establish an emergency fund (22%) and diversify revenue streams by introducing new products or services (20%).
While more than half (52%) of small business owners are confident that their banks understand their cash flow concerns, almost 20% are unsure if their banks do so – pointing to an opportunity for banks and business owners to expand their relationships.
KeyBank, a top SBA lender1, has provided more than $4.5 billion in small business loans and lines of credit. Most recently, KeyBank received their 11th consecutive “Outstanding” rating from the Office of the Comptroller of the Currency (OCC) on its most recent Community Reinvestment Act (CRA) exam. KeyBank’s recent exam period covered January 1, 2019- December 31, 2021. A significant investment to support low-to-moderate income communities included the banks quick response to support both clients and communities through the pandemic. In 2020 and 201, KeyBank processed 69,000 loans through the Paycheck Protection Program (PPP), providing more than $11.2 billion in critical funding to small and mid-size businesses.
Methodology
This survey was conducted online by Survey Monkey. 1,983 respondents, ages 18-99, located in the United States, who own or operate a small-to-medium size business with an annual gross revenue of less than $10 million, completed the survey in March 2024.
Learn more about KeyBank’s opportunities and programs for your small business by visiting key.com/small-business. KeyBank offers a range of tools, including the KeyBank Small Business Check-In, KeyBank Small Business Financial Review and the Business Cash Flow Calculator.
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This material is presented for informational purposes only and should not be construed as individual tax or financial advice. KeyBank does not provide legal advice. All credit products and SBA Loans are subject to approval, terms, conditions, and availability and subject to change. Key.com is a federally registered service mark of KeyCorp. ©2024 KeyCorp
1Source: Statistics released by the U.S. Small Business Administration (SBA) October 2023 for total approved loans through the SBA’s 7(a) lending program during the federal fiscal year ending 10/2023.
