The Best Resources For Small Business Owners to Grow Their Financial Education, 360 Degrees of Financial Literacy, EVERFI’s Small Business Education, the Business Literacy Institute, and Operation HOPE are five examples of resources that small business owners can use to grow in their financial education. Equally, cash flow management and budgeting are some examples of pain points for small business owners when it comes to dealing with finances.


Cash flow management, budgeting, and unforeseen expenses are among the top pain points for small business owners when it comes to dealing with business finances.

  • Cash flow management is one of the most significant challenges small business owners face when handling financial matters. 69% of small business owners polled by Intuit QuickBooks cited cash flow concerns as their primary challenge. Equally, a U.S. bank study reported that poor cash flow management causes about 82% of small business failures.
  • A 2019 Small Business Trends report by Guidant Financial revealed that 33% of small business owners surveyed said lacking cash flow is their greatest challenge. Ken Wentworth, owner of Mr. Biz Solutions approved the assertion and said, “This is a constant, regardless of the year.”
  • Overall, such statistics and sentiments confirm that business owners have issues managing cash flows. Moreover, the COVID-19 pandemic has left 38% of businesses operating normal, 30% with reduced staff and hours, 23% say their businesses are running but services are impacted, while 8% say their businesses shut down temporarily due to restrictions.
  • Small business owners also struggle with budgeting, which is key to managing and operating a business. Budgeting allows businesses to compare the results to the projections, which can promote timely decisions making regarding injecting more cash or cutting cash flows.
  • A report by Forbes notes that small business owners often budget for items that end up consuming most of their money. For example, hiring expensive recruiters to handle hiring processes, credit card processing fees, consultants, tax overpayments, excessive outsourcing, expensive and too much software, unmeasured advertising spend, and expenses that do not advance the business’ goals.
  • In this regard, for small businesses to manage budgeting correctly, they need to create realistic budgets that focus on the business’ goals and profit potential. Thus, small business owners must understand all their income sources and expenses to balance the money coming in, remaining, and the one going out.
  • A 2018 small business accounting study by Clutch reported that 35% of small business owners said unforeseen expenses are among their top financial challenges. It is easy for business owners to forget minor costs arising from things they cannot predict easily, including a broken air conditioner, stolen or damaged inventory, broken equipment, etc.
  • Small business owners can mitigate this challenge by setting aside emergency funds to cater for such unprecedented expenses. They can examine their past business expenditures to get a rough estimate of how much to set aside for emergencies without straining their current budget.
  • Overall, unforeseen expenses happen all the time, which is why it is vital for small businesses to have budgets that guide and fund their operations. This way, they can set aside some money to fund any emergencies that may arise.


Mixing business and personal banking accounts, low rates of bank financing approvals for small business owners, and the variations in access to finances across ethnicities are some challenges small businesses face when obtaining banking products or growing their businesses.

  • Research shows that over “one-quarter of small businesses do not have a separate business bank account for their business, according to a Clutch survey.” Equally, 23% of small business owners surveyed said they mix business and personal finances, which is a challenge they create for themselves.
  • According to experts, mixing business and personal funds makes it difficult for small businesses to monitor cash flows. Owners cannot tell how their businesses are running if both personal and business finances are involved in running the business.
  • Small business owners, especially sole proprietors are fond of mixing business and personal finances, which can raise red flags when the business’ finances are being examined by “tax auditors, potential business partners, or potential business purchasers.” Overall, creating separate bank accounts for small business would enable owners to easily monitor how their businesses perform.
  • According to research, banks deny over four in five small business owners seeking financing. In the wake of the COVID-19 pandemic, about 40% of small business owners who applied for the Paycheck Protection Program and 90% who applied for the Economic Injury Disaster Loan program were yet to receive their loan proceeds, as of October 12th.
  • Several challenges, including the deteriorating economic climate are to blame for the inability of small business owners to get financing. Some challenges include lacking collateral for the loan, poor or insufficient credit, large debt or low income, insufficient capital investment, and high small business loan application failure rate.
  • According to a Biz2Credit survey, in August 2020, big banks approved only 13.6% of small business loan applications, while small banks approved 18.5% of applications. Barriers to entry for the average small business owner are to blame for the low chances of approval.
  • New research shows that the relationship between lenders and neighborhood demographics is different when comparing Blacks, Latinos, Asians, and Whites. For example, small businesses owners in predominantly Black neighborhoods had to wait 10 more days37 in total than their White counterparts for their PPP assistance.
  • Data from the Federal Reserve’s 2020 Small Business Credit Survey concluded that online lenders provided the most credit to Black-owned small businesses, while other small businesses got financing from large banks. When examining potential sources of financing for majority-Black neighborhood businesses, fintechs and online lenders were the preferred sources as opposed to banks.
  • The top three providers Blacks prefer seeking PPP financing from are Bank of America (13%), Kabbage (9%), and Celtic Bank (8%). On the other hand, small banks and credit unions accounted for 40% of loans in majority-white neighborhoods, while Community development financial institutions (CDFIs) accounted for about “6% of loans for small employer businesses in majority-Black neighborhoods.” Overall, the existing relationship between lenders and small business owners in the U.S. varies based on demographics.


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