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Want to Understand SMBs Better?New Report Provides Key Data

Updated: Feb 4


33%. That's the percentage of SMBs generating revenue of less than $1 million that say credit cards with rewards are their most used borrowing tool, per a report from PYMNTS Intelligence in collaboration with US Bank.


The report on SMB Borrowing Dynamics provides a comprehensive analysis based on a survey of 2,668 executives from SMBs generating less than $25 million in annual revenue. The survey, conducted from October 9, 2023, to November 17, 2023, explores the trends, tools, and decision drivers affecting SMB borrowing. They use 3 revenue segments: 0-$1mil (low), $1-10mil (med), and $10-25 mil (high). 


borrowing strategy

The following are some key insights from the 18-page report:

  • 90% of SMBs used at least one tool to borrow in the last year

  • Rewards credit cards top the list, used by 51% of SMBs — far higher than the 15% that use other, non-rewards credit cards. 

  • Lines of credit, at 36%, and Buy Now, Pay Later (BNPL), at 33%, are also widely used flexible borrowing tools. 

  • Fixed-term products are notably less popular, with bank loans, at 31%, and ‘merchant loans’, at 30%, the most common. (They use the term merchant loans for what I believe to be merchant cash advances).


  • Among the SMBs that used a borrowing tool in the last 12 months, high-revenue SMBs employed 3.5 different tools, on average.


borrowing strategy


Size Matters! Revenue size is a strong predictor of borrowing strategy and comfort with leveraging debt. SMBs' borrowing behavior and annual revenue exhibit a clear correlation.

Twenty percent of low-revenue SMBs refrained from using any borrowing tool in the year leading up to the survey, while just 5.1% of medium-revenue and 2.9% of high-revenue SMBs did the same. This disparity highlights smaller SMBs' cautious stance on borrowing and suggests a potential gap in accessible borrowing tools targeting lower-revenue firms

  • SMBs use borrowing tools for a variety of purposes. Sixty-eight percent of firms surveyed that used a borrowing tool in the last 12 months did so for business expansion, 55% for operational efficiency, and 48% for financial stability. However, priorities vary by business size. Low-revenue SMBs place much greater emphasis on supply chain management, at 28%, than high-revenue firms, at 11%. Similarly, low-revenue SMBs prioritize financial stability disproportionately more than high-revenue firms, at 19% and 11%, respectively. In contrast, high-revenue SMBs are comparatively more focused on achieving operational efficiency, at 25%, and market presence, at 18%, than low-revenue firms.



borrowing strategy


  • SMBs are concerned about borrowing costs and managing debt. The data shows that 34% of SMB executives overall highlight borrowing costs as a concern. Among those who cite it as the most important concern, it is particularly acute for low-revenue(< 1 million) SMBs: 18% cite cost as their most significant concern, compared to just 10% of high-revenue SMBs. Similarly, taking on additional debt is the most pressing fear for 18% of low-revenue firms.

Key Points for Business Lenders

  • SMBs are increasingly using borrowing tools to achieve their business goals. This presents an opportunity for lenders to develop innovative products and services that meet the specific needs of SMBs.

  • SMBs are looking for flexible and accessible borrowing tools. Lenders should focus on developing products that offer multiple options and favorable terms.

  • SMBs are concerned about borrowing costs and managing debt. Lenders should be transparent about their fees and offer guidance on debt management.


Overall, the SMB borrowing landscape is dynamic and evolving. Lenders and brokers who can adapt to the changing needs of SMBs will be well-positioned for success.


To read the full report, go HERE.


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