Small businesses were some of the hardest hit in the COVID-19 pandemic and the lockdowns that were implemented as a result. While facing sizeable challenges, SMBs in the US have continued to grow in numbers, with more than 4 million new businesses created in the US during 2020 – the highest total on record.
Both existing and new small businesses still face a number of hurdles, but with over a third (39%) of consumers in the US saying it is more important than ever to shop local, it’s an optimistic time for SMBs – with the right support. 139 million US consumers would like to be rewarded for shopping local, providing the perfect opportunity for small businesses to capitalise on this consumer behaviour shift of being more “loyal to local”. But with all the changes and challenges small businesses have had to face, what does this look like in reality, and how can banks support their SME customers?
We gathered industry experts Isabella Guzman, Administrator at the SBA, Jeff Fazio, Head of Small Business at TD Bank, Holly Wade, Executive Director of the Independent Business Research Center (NFIB), Alastair Lukies CBE, Founder and CEO at Pollinate, along with PYMNTS CEO, Karen Webster, to discuss. Here are the key takeaways.
I think nationally, people really do recognise that small businesses enliven their Main Streets and define the community. They’re starting to recognise the impact small businesses have on the community and economy. I’ve been able to see the impact that our small businesses – especially in certain industries – have had. Their resilience and commitment to pivot and adapt their businesses has just been so inspiring. COVID-19 was the catalyst for technology adoption, and businesses have come together and formed partnerships. I think now more than ever there’s a willingness to join and be part of a larger whole.
ISABELLA GUZMAN, ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION (SBA)
Many of our customers are tied to their communities, and really want to dig roots into those communities. Banks are always perusing for new products and offerings to better serve their clients and help small businesses. One way of doing that is through supporting small businesses to be more competitive in their marketplace and help them drive customer acquisition into their stores. There’s optimism out there as we move forward through this pandemic.JEFF FAZIO, HEAD OF SMALL BUSINESS, TD BANK
Small business owners have had to adjust to make sure they’re still connected to their consumers throughout the pandemic. Our own data showed that sentiment on business conditions going forward has improved significantly over the last six months. I see all of these new technological ways of connecting over the last year and that is certainly making a difference.HOLLY WADE, EXECUTIVE DIRECTOR, INDEPENDENT BUSINESS RESEARCH CENTER (NFIB)
COVID-19 has reinforced the importance of SMBs to communities around the world. Running a small business has always been complex, and now many SMBs have the added complexity of having had to implement new digital channels, at pace. It’s encouraging to see that more and more consumers are looking to support local businesses. As an industry, we must work to make it easy for SMBs to manage and run their businesses day to day.ALASTAIR LUKIES CBE, FOUNDER AND CEO, POLLINATE
Banks are ideally placed to support SMBs. Consumers trust banks 2.5x more than technology companies with their transactional data, and 39% of US consumers say they would trust banks to operate a digital loyalty programme that allows for a tailored and personalised loyalty experience across multiple small businesses.