Q2 2023 Small and Medium Sized Business Owner Survey
41% of business owners are opening and funding accounts at New FIs. Banks must focus on winning and retaining the operating account position or risk slow erosion of lower cost deposits.
August 8, 2023
In late June 2023, Monit conducted its quarterly pulse survey of over 300 small and medium-sized business owners from across the US. The survey monitors shifts in owners' sentiment over the prior quarter about the economy and operating environment, changes in business priorities, and tracking emerging needs.
The results of this survey can be particularly useful for business bankers, as they provide insights that can help them make informed decisions about how to support small and medium sized businesses and better tailor their solution to meet the evolving needs of their clients.
SMB owners continue to be a relatively optimistic group with 62% reporting the economy/operating environment improved vs. prior quarter. Further, 58% of owners reported increased customer demand over the same time period.
SMB owner concerns remain consistent with the Economic environment and Buyer/Customer Stability remain their top two concerns, followed by Interest Rates.
57% of owners reported an increased appetite to invest in growth, down 9% from the prior quarter Q2 ’22. Funding growth with cash-on-hand remained the most popular option, selected by 60% of respondents.
80% of Business owners reported focusing on their receivables management in response to changes in their operating environment
86% of owners moved deposits around in response to recent turbulence in the banking industry. This includes 31% moving deposits to an existing account at a different bank while 41.2% reported setting up and funding a new account.
SMBs continue to manage their cash well as Cash Coverage and median cash on hand remains stable and above pre-pandemic levels.
Actionable Considerations for Bankers:
Optimistic owners are looking to grow their businesses. While lending remains an option to fund growth (49%), other services that will help them improve their cash position may be in higher demand as 60% reported plans to self-fund growth.
Business owners are opening and funding accounts at new FIs. Banks must focus on winning and retaining the operating account position or risk slow erosion of lower cost deposits.
Improvements in receivables management continue to be a priority for business owners in response to the tougher operating environment. Banks with services and focused delivery models that aim to improve SMBs’ operating costs and reduce cash collection cycles will be in a stronger position to win the operating position.