Hardly a day goes by without each of us transacting with a small‑ to medium‑sized business (SMB).
From dry cleaners to coffee shops, we’re surrounded by small businesses that make our lives more convenient. And these businesses represent an enormous opportunity for community and regional financial institutions to expand revenue and grow their accountholder bases.
It’s hard to overstate the sheer scale of the potential SMB opportunity. There are 34.8 million small businesses in America, representing 99.9% of all businesses and employing 46% of the total workforce.
The growth of the SMB market is a powerful trend, and the industry is taking notice of the size of this opportunity. According to the 2025 Strategy Benchmark from Jack Henry™, 80% of financial institutions say they’ll expand their service offerings for small businesses over the next two years.
This represents an awareness of the large revenue and growth opportunities available for this segment, particularly in four main areas:
Revenue enhancement
The revenue potential from SMBs for financial institutions is around $130 billion. The average daily cash balance of a small business is estimated to be $13,900, compared to a consumer’s average balance of $3,000. So, opening and servicing SMB accounts represents an enormous revenue opportunity.
New accounts
A recent business banking survey reports that two‑thirds of SMBs are somewhat or very likely to look for a new banking relationship. Nearly 40% desire a business checking account with better product features and capabilities. Ultimately, they’re looking for a trustworthy advisor they can work with and rely on. Community banks and credit unions best fit that bill. And with the larger account balances in business accounts, these customers present attractive long‑term account development opportunities.
Loan growth
When small businesses are shut out by large financial institutions, they turn to smaller banks and credit unions for help. Small businesses generate about $242 billion in unsecured loans annually, mostly from working capital loans under $100,000. This is a loan type and size that community banks and credit unions excel at. A survey found that 82% of small business loan applications were at least partially approved at small financial institutions, versus only 68% at large financial institutions.
Payments and related services
Smaller businesses are open to changing their payment arrangements if the service proposition gives them the tools they need, such as instant payments, card acceptance and immediate distribution of funds. Since the younger generation of entrepreneurs is most likely to lean into modern payments services—and more likely to leave or switch to a financial institution with a more modern payments offering—the opportunity is there to offer the services these smaller businesses are looking for.
Addressing pain points to attract SMB accounts
Attracting and forming long‑lasting relationships with SMBs requires understanding and addressing their unique challenges.
Pain point: Payments
Payments tops the list of SMB challenges. Specifically, SMBs have indicated that the ideal payments system would accept all cards and wallets, provide instant transaction visibility, transfer funds immediately, be easy to use and offer affordability. Addressing these areas can create a significant opportunity to attract new SMB accountholders.
Pain point: Accounting and forecasting
Small businesses want more bundled solutions to address the fragmentation that impedes their ability to manage their finances. Although 95% of small businesses use digital tools, most have at least six different platforms—and over 60% of SMBs seek accounting and payment services.
With less than half of small businesses using digital tools—and the rest likely still using spreadsheets—cash flow management and forecasting are particularly challenging. The opportunity here is to implement a system with payments information integrated or seamlessly extracted into an accounting system for easy reconciliations, which leads to accurate and effortless cash flow forecasting.
Pain point: Financing
SMBs need flexible credit solutions to proactively manage cash flow. Currently, the number‑one source of credit financing by SMBs is credit cards, with 50% using business cards and another 23% using personal cards. These business owners often use their business or personal cards for the rewards program, but they still need unsecured business loans, secured or unsecured lines of credit or home equity–based business loans.
Pain point: Being treated like a retail customer
Small business owners deserve more than a one‑size‑fits‑all approach. Offering flexibility—for example, scheduling calls at times that work best for them—shows respect for their time and builds stronger relationships. This personalized approach demonstrates care and an investment in their success.
SMB owners, both new and established, are attracted to financial institutions that offer business support and advice. That’s why bigger institutions sometimes have business centers in their branches that can offer everything from meeting rooms to copying services.
Addressing this need might include offering dedicated business advice lines to help with everything from starting a new business to getting an EIN, and will solidify relationships with SMB accountholders.
Beyond the trend
Securing and effectively serving SMB accountholders is a strategic imperative that will define the competitive landscape of 2026. By proactively solving the genuine pain points of SMBs, local banks can leverage their community‑focused identity to win this critical segment.
This is about more than just jumping on a trend—it’s about securing a powerful, long‑term revenue engine that ensures relevancy and growth in the coming year…and beyond.
Beth Ericson is a Senior Analyst, Strategic Initiatives, at Jack Henry.
