SMB Finance

SMB leaders feel largely positive about their business outlook

  • Small and medium-sized businesses are more optimistic about the economy and future compared to global enterprises.
  • While one-quarter of small business owners are perturbed about the economic situation, one-half of them believe economic conditions in the US have fared well to a certain degree.

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SMB leaders feel largely positive about their business outlook

With concerns running high about surviving the roller-coaster ride that is the US economy, sentiment among small and medium-sized businesses (SMBs) has broadly turned for the better compared to global enterprises. And while SMBs projected strong revenue growth midway through 2023, one-half don’t have full funding to expand their business prospects, according to a new report by Visa. 

Financing has always been a significant challenge for small and medium-sized companies, as a majority of them do not conform to the risk appetite of traditional lenders. Meanwhile, current economic circumstances continue to exert pressure on the financial stability of SMBs. While one-quarter of small business owners are perturbed about the economic situation, one-half of them believe economic conditions in the US have fared well to a certain degree with the resumption of growth and falling inflation, compared to a year ago. 

Drilling down into the data further shows that larger SMBs, particularly those operating in the finance and insurance sector, are more confident about the economy and their business outlook moving forward.

To have better control of their budgets in response to economic uncertainties, SMBs are avoiding upfront costs associated with traditional payment methods like cash or credit cards. To equip SMBs with flexible financing options and increase their cash flow, Galileo recently partnered with Mastercard to enable lenders, banks, and fintechs to extend a buy now, pay later (BNPL) offering to their small business clients, for example. Along the same lines, Amazon and Affirm have joined forces to offer BNPL solutions to sole proprietors or single owners of small businesses who make purchases on Amazon Business. 

In addition to expanding their customer bases, SMBs are also turning to different vendors and suppliers to increase and diversify their resources and mitigate risks tied to supply chain disruptions.

That said, an array of issues continue to exist for SMBs in the bigger picture: from making their way across global supply chain issues and economic headwinds to mastering international payments and financing barriers. Despite ongoing challenges, the report shows that most SMBs remain motivated and ambitious about their future.

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