More than One-in-Five US SMBs Could Run out of Cash by Christmas

Invoice finance company Stenn has today released new findings highlighting that US SMBs are cash-strapped heading into the festive period, betting big on the holiday season to top up reserves that are running dry. Research amongst 250 founders, owners and CEOs of US small and medium sized businesses (SMBs), has found that the majority (56%) hold just 6-18 months of cash reserves, with a worrying one-in-five (22%) indicating they could run out of cash by Christmas. All the more concerning is that this is a challenge that disproportionately affects female founder, and led, SMBs with the research showing that 34% have reserves that will last them at most five months – double the number of their male counterparts (16%). Key survey findings include:

• Many small businesses are nearing an inflection point in their growth journey. Over 45% indicate that they expect to scale their operations within 6-18 months, while 37% believe they are just 1-5 months away from leveling up.
• When asked what could help their businesses scale faster, 43% state 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%).

According to data from the U.S. Chamber of Commerce, 33.2 million small businesses employ 61.6 million people, comprising 46% 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. “Small businesses are the unsung heroes of the economy in the U.S. So many of them are built on founders’ ingenuity and traditional lenders don’t always see their value,” said 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.” Please see the accompanying infographic here.