In March 2016, Mercator Advisory Group fielded
a web-based survey of U.S. small businesses (between $500 thousand and $5
million annual sales) regarding payment acceptance, B2B payments and use of
banking services and alternative lenders. Business Credit Cards and B2B Payments:
Addressing Credit Opportunity is the second of three reports summarizing
the results of the 2016 Small Business
Payments and Banking Survey.
Our survey shows that more than 4 in 5 small businesses
have a positive outlook and expect this year to be a good time to borrow funds
to invest in their businesses. Nearly all have some type of business account
with a financial institution including 8 in 10 who have a business credit or
Small businesses are a vital segment of the U.S.
economy since they fuel job creation and foster economic growth in the United
States. Yet the value they contribute to our economy is often understated
because individually they are relatively insignificant. Collectively, though,
an estimated 27–28 million small businesses accounted for at least 60–80% of
all U.S. jobs in 2012 and two-thirds of new jobs created in the decade 1993 to
2013, according to the U.S. Small Business Administration.
Mercator Advisory Group’s 2016 Small Business Survey
findings show that this collectively powerful market segment has clear
financial needs. Nearly all firms in this segment have business relationships
with a primary financial institution to provide business debit, credit, charge
cards, or checking accounts and relationships to obtain a host of other
services provided from financial institutions as well as nonbanks. Their
financial needs are complex and many struggle at least at some point to manage
their cash flow, as small businesses are more prone to seasonal business volume
fluctuations and delays in collecting on invoices, collections that affect
their purchasing power. Small businesses are more likely than consumers to carry
balances on their credit cards, and many use their personal accounts to get the
credit they need to finance business purchases.
“Small businesses desperately need credit and
access to ‘just in time’ funding,” notes Karen Augustine, Mercator Advisory Group’s Manager
of Primary Data Services, the author of this report. “Business credit
is the perfect solution but business credit lines are not always sufficient for
their business needs.”
In total, over 1,600 qualified responses were
obtained from decision makers at revenue-qualified small businesses that accept
credit and/or debit cards for payment. The sample included a geographically
dispersed quota of 500 responses from businesses with annual sales of $2–5
million and the remainder from businesses with annual sales of $500,000–$1.99
This report contains 34 pages
and 16 exhibits.
Subscribers to Mercator Advisory Group’s 2016 Small
Business Payments and Banking Survey have access to these reports as
well as survey crosstabs, PowerPoint slides of the report exhibits, and the
option of requesting custom queries from the survey data.