Eight in 10 Small Businesses Want Credit and on Their Terms

Small businesses are sending lenders the message that credit is broadly within reach, so the real fight is over flexibility and control.

That was the central theme of the PYMNTS Intelligence report “SMB Growth Monitor: Small Businesses, Big Credit Needs,” which drew on a survey of 514 small- to medium-sized business leaders in the United States conducted over the summer.

It found that many firms are confident about getting approved for new credit, which shifts the market away from basic access and toward product design, pricing and features that match how businesses are spending.

Key findings from the report:

• Approval confidence is high, as 83% of SMBs said they thought they would get approved for a new business credit card, a sign that underwriting is not the main concern for many firms.
• Business credit cards are used for planned spending, as 53% of business credit card use is mostly or almost always planned, suggesting these cards are often treated as a day-to-day operating tool rather than a last resort.
• New card models are drawing strong interest, as 56% of firms are very or extremely interested in a card that lets them choose between earning rewards or getting a lower APR each statement period.

Other findings added texture to what credit needs really mean in practice. The report showed that SMBs want credit products that fit uneven cash flow and delegated spending across teams. It highlighted demand for options such as payment due dates aligned to cash flow or receivables, virtual card numbers for specific purchases and customizable spending limits by employee or department.

The data also showed gaps by segment. Nearly all high-revenue firms, defined as those above $1 million in annual revenue, said they expect approval for a new business credit card, while firms that were not confident they would survive the next two years are less likely to say the same.

As for how that credit is used, the data showed that low-revenue SMBs use personal credit cards for 30% of transactions, while high-revenue SMBs use them for only 24%.

Taken together, the findings portrayed a market where many SMBs believe they can obtain credit, but do not see available products as fully built around how they operate.

For issuers and FinTechs, that means offering products that make it easier to manage spend, match payments to cash flow and add controls that reduce surprises.

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