Business Banking in 2023

In light of recent bank failures, many American business owners may wonder if their funds are safe. To get a reading on their banking habits, we surveyed over 700 of them across multiple industries about where they bank and how they’d fare in a similar crisis. Our findings will help you understand the current risks as well as how (and if) businesses are preparing.

Key Takeaways

• Recent bank collapses have impacted nearly 1 in 15 business owners.
• Since these collapses, 43% of business owners are now less willing to work with new bank partners.
• The top 3 actions of the 18% of business owners who are diversifying are:
  • Keeping cash reserves on hand (67%)
  • Using alternative banking methods (62%)
  • Investing in stocks and bonds (60%)
• The top 5 reasons business owners aren’t diversifying are:
  • Happy with their current banking arrangements (68%)
  • Believe recent bank collapses are isolated incidents (22%)
  • Funds already diversified (21%)
  • Don’t know of or understand alternative options (18%)
  • Concerns about the safety or security of alternative options (14%)
• 31% of business owners believe they would last more than a year if faced with a financial crisis, followed by 23% who said they’d last 6-12 months.
• Percentage of business owners who said they would only last three months or less if they faced a financial crisis, by industry:
  • Hospitality: 36%
  • Education: 29%
  • Health care: 27%
  • Retail: 25%
  • Technology: 24%
  • Real estate: 19%

Regional Banking

• 66% of business owners bank with a regional bank, but 28% of them are considering a switch.
• Real estate business owners were most likely to use a regional bank (75%) followed by technology business owners (73%).
• Percentage of business owners who bank with a regional bank, by industry:
  • Real estate: 75%
  • Technology: 73%
  • Health care: 67%
  • Hospitality: 64%
  • Retail: 64%
  • Education 62%

Key Takeaways

• 61% of American business owners are somewhat confident in the U.S. banking system, while just 29% are very confident and 10% aren’t at all.
• One-third of business owners believe bank customers’ deposits should be fully insured with no limits.
• When choosing a bank, business owners’ top 3 recommendations are:
  • To look for a bank with a strong reputation and track record (73%)
  • To consider the fees and charges (67%)
  • To consider the level of service and support (52%)

Preparedness and Backup Plans

• 56% of business owners said they feel prepared to face another financial emergency, while 44% do not.
  • Percentage who do not feel prepared, by industry:
    • Hospitality: 61%
    • Retail: 50%
    • Education: 40%
    • Health care: 36%
    • Technology: 34%
    • Real estate: 22%
• 63% of business owners have a financial backup plan in place in case of emergencies, but 37% do not.
  • Percentage who do not have a backup plan, by industry:
    • Hospitality: 42%
    • Retail: 41%
    • Health care: 39%
    • Technology: 28%
    • Education: 26%
    • Real estate: 16%
  • Of business owners who have a financial backup plan, their main reasons are:
    • Protecting against unexpected expenses (68%)
    • Preparing for a financial crisis (57%)
    • Weathering seasonal fluctuations in revenue (32%)
    • Maintaining business continuity during economic downturns (31%)
    • Seizing investment opportunities (21%)
    • Funding future growth initiatives (20%)
    • Paying for equipment or infrastructure (13%)
  • These backup plans include the following:
    • Emergency savings account (77%)
    • Personal savings account (51%)
    • Selling assets or investments (45%)
    • Investment portfolio (37%)
    • Line of credit (35%)
    • Insurance policies (23%)
    • Crowdfunding or seeking investor funding (6%)

Methodology

B2B Reviews surveyed 725 business owners about the recent bank collapses. By industry, 23% were in retail, 19% were in technology, 6% were in education, 5% were in hospitality, 5% were in health care, 5% were in real estate, and the rest were in a different industry. As for business size, 65% were micro-business owners (less than 10 employees), 13% were small-business owners, 10% were mid-sized business owners, and the remaining 12% owned large businesses.

About B2B Reviews

At B2B Reviews, we pride ourselves on being a trusted resource for businesses seeking valuable insights on various industries, providing expert analysis, and empowering decision-making through comprehensive evaluations that cover a wide range of topics, including business loans and beyond.

Fair Use Statement

If you’d like to share our findings with other businesses or for any other non-commercial purpose, please include a link to this research.

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