Almost a Quarter of Small Businesses Have Fewer Than Six Months of Cash Reserves: Survey

Stenn releases new findings highlighting where small to medium (SMB) business leaders need support.

“Small businesses are the unsung heroes of the economy in the U.S. Because so many of them are built on a founder’s ingenuity, traditional lenders don’t always see their value,” says Noel Hillman, chief commercial officer at Stenn. “We’re committed to providing the flexible financing that small businesses need to manage cash flow, invest in new markets, and enhance supply chain logistics. Stenn’s flexible financing options are tailored to help SMBs maintain stability and achieve sustainable growth.”

According to data from the U.S. Chamber of Commerce, 33.2 million small businesses employ 61.6 million people, comprising 45.9% of all domestic employees as of 2023. With 20% of small businesses failing within their first year of operation, and more than 45% failing in the first five years, it’s critical for these small businesses to have the right resources, support, and access to capital quickly to stay afloat.  

Key Takeaways:

• Over half of SMBs (56.4%) reported having 6-18 months of cash reserves, while 21.6% said they had only 1-5 months of reserves, indicating that the nation’s largest employer by category is vulnerable to financial shocks. 

• Many small businesses are nearing an inflection point in their growth journey. Over 45% of respondents indicated that they expect to scale their operations within 6-18 months, while 36.8% believe they are just 1-5 months away from leveling up. 

• When asked what could help their businesses scale faster, 43.2% stated balancing short-term financial needs with long-term growth objectives, closely followed by the need for more market insights and customer analytics (42%) and investment in marketing, inventory and new offerings (40.4%).