Small businesses are the backbone of the U.S. economy, representing 99.9% of all U.S. firms and employing nearly half of the private workforce. Their innovation, resilience, and community impact are undeniable—but so are the challenges they face. From navigating inflation and rising costs to securing affordable capital, many entrepreneurs are stretched thin. What they need isn’t just funding—they need support, guidance, and a trusted partner to help them build a sustainable future.

The Struggles of a Small Business Owner

According to the Federal Reserve’s 2024 Small Business Credit Survey, small businesses are grappling with a range of financial and operational hurdles:

• Rising costs and persistent inflation
• Difficulty accessing affordable capital
• High interest rates that dampen growth

A significant number of entrepreneurs also lack financial education that helps with things like cash flow decisions, proper budgeting strategies, or knowledge of tax optimization. Only half of small business owners say they have a good understanding of financial management before starting their business, and 45% say they’ve lost at least $10,000 in profits due to low financial literacy. Financial education isn’t just a nice-to-have—it’s a make-or-break factor in small business success.

A Missed Opportunity for Financial Institutions

While many banks and credit unions offer products for small business owners, too few provide the personalized, timely financial education that entrepreneurs need to make confident decisions. This gap represents a missed opportunity – not just for community impact, but for customer acquisition and retention. Just-in-time education, available when they need it, can transform routine transactions into coaching moments.

Small business owners don’t need generic advice. They need a trusted advisor who understands their journey and can offer guidance at every stage. To meet this need, banks and credit unions need to offer financial education on:

• Business planning and budgeting
• Legal structures and registration
• Accessing capital and managing cash flow
• Building credit and navigating taxes

By embedding timely financial education into your customer experience – through your mobile app, website, onboarding process, or in-branch conversations – you can meet entrepreneurs where they are, when they need it most.

Why It Matters Now

The small business market is growing rapidly, forecasted to reach over $7 trillion in lending volume by 2032. And with more than one-third of small business owners open to switching financial institutions, offering value-added services like personalized education can be a powerful differentiator. Moreover, financial institutions that offer educational support report up to 20% higher customer retention. Fintech companies are already capitalizing on this gap with digital-first solutions. Banks and credit unions must act now to compete—not just by offering competitive rates, but by becoming partners in financial growth.

The Business Case for Financial Education

Financial institutions that invest in small business education aren’t just doing the right thing; they’re making smart business decisions. Financially educated entrepreneurs are more likely to:

• Stay with their banking partner long-term
• Make better use of financial products
• Grow their businesses and increase demand for services
• Refer others to institutions they trust

Financial education drives improved financial behaviors, positive cash flow, and higher levels of operational efficiency – especially when training is offered through interactive, mobile-first platforms.

Small businesses are resilient, innovative, and essential to our communities. But they can’t do it alone. Financial institutions have a unique opportunity to step in—not just as service providers, but as educators and advocates.

Learn how EVERFI can help you provide financial education to small business owners and empower the next generation of entrepreneurs.