Cash flow is always top of mind for any business. That’s even more true when economic policy and regulatory conditions shift. As the Trump administration applies sweeping global tariffs, consumers are pulling back on spending. Along with uncertainty about the levies’ longer-term status, the rapid changes are creating a newly volatile operating environment that is severely pressuring some enterprises. Fewer than 1 in 2 U.S. small and medium-sized businesses (SMBs) currently have access to any form of financing, new PYMTS Intelligence data shows. Thirteen percent with no access to financing consider their survival at risk in the next two years. Overall, 6.9% think they might not survive.
While such pessimism pervades nearly 20% of smaller businesses, the situation is potentially precarious for half. Some 50% currently rely solely on their daily sales or owners’ personal savings to survive. By contrast, those with business credit cards report high levels of satisfaction. Meanwhile, others that can’t secure financing through mainstream credit sources — perhaps because they’re seen as high risk or don’t have sufficient collateral — often turn to riskier options, such as unsecured loans or personal credit cards. It should thus come as no surprise that businesses with access to traditional sources of financing are more confident in their ability to navigate current economic headwinds and their chances of survival in the long term.
At the same time, many SMBs that lack access to any form of financing, whether traditional or alternative, also claim not to need it. That is a counterintuitive finding amid an uncertain business environment where survival depends on the ability to tap timely funding.
These are just some of the findings detailed in “Brewing Storm: Why 1 in 5 Smaller Businesses Without Financing Fear They May Not Survive Tariffs,” a PYMNTS Intelligence report. This edition examines SMBs’ access to and use of varied financing sources. The report draws on insights from a survey of 560 SMBs conducted from Feb. 5, 2025, to Feb. 12, 2025.
Survival at Risk
One in five SMBs are worried about staying open.
PYMNTS Intelligence finds that businesses without access to traditional financing are much less confident in their ability to adapt to a changing economic environment and remain in operation. During the survey in early- to mid-February, some 6.9% of all SMBs said they were unlikely to survive the next two years. This figure spikes to 13% among SMBs without access to financing, an 86% increase.
PYMNTS Intelligence found that 44% of SMBs had access to any form of financing. Just 36% had access to readily available cash, including another 8% that also had cash in the bank.
Fewer than 3 in 10, or 28%, of all SMBs have business credit cards. But those cardholders are satisfied with that form of financing. Sixty-four percent of businesses with access to any form of financing use their corporate cards to withdraw money for business operations. The cards offer SMBs many advantages, allowing them to access cash on a moment’s notice for generally low fees, as long as repayments are made on time. Four in 10 businesses with access to financing use personal credit cards held by their owners. This is a riskier financing method as it intertwines the owner’s personal and business finances. Instability in either area could potentially wreck the owner’s or their company’s financial well-being.
Twenty-eight percent of SMBs used other financing sources, such as bank loans or investment assets. These credit options carry risks, such as higher fees or penalties if repayments aren’t made promptly.
Significantly, most SMBs did not have access to any financing. Such businesses instead relied solely on money from day-to-day sales or cash in the bank for survival. These SMBs have little to no safety net in the event of economic changes or declining revenue. A single slow business day could potentially jeopardize vendor payments or payroll, putting their financial future in peril. PYMNTS Intelligence found that 16% of SMBs did not have access to cash. Four in 10 had only cash in the bank. Specific industries are more vulnerable than others. For example, 64% of hotel, restaurant and entertainment companies’ sole financing option was cash they had in the bank.
The more precarious a business’s financial health, the more likely it correlates with financing access. More than 1 in 3, or 35%, of SMBs with decreasing revenue had no access to cash in the bank or readily available cash, compared to just 8% of firms with increasing revenue. Banks and credit card providers are more willing to extend credit to successful businesses, as there is a greater chance of them making repayments on time.
SMBs Weigh Risky Financing Options
Business credit cards are a favorite source of financing, but many SMBs turn to riskier options when they are desperate.
Business credit cards are clearly the favorite option for SMBs with access to financing. This is because these cards offer instant access to cash up to a credit limit at any time. Our research finds that 44% of SMBs with access to financing used these cards in the last 12 months, with no other source of financing used by more than 15% of these firms — a testament to the cards’ reputation for convenience and reliability among SMB owners. SMBs see business credit cards as a safety net. These cards are popular with businesses regardless of their optimism about survival. Forty-four percent of SMBs who said it was very likely they would survive the next two years used such cards. That’s similar to the 45% of those who said their survival was somewhat likely and 40% who said the chances of survival were slim or not at all likely.
Despite business credit cards being the top financing choice, SMBs that were more pessimistic about their long-term survival were much more likely to use riskier sources of financing as they maxed out their card limits. Twenty-seven percent of businesses that said it was unlikely they would survive the next two years used personal credit cards. Some 19% used unsecured bank loans, which typically have higher interest rates.
In general, companies with lower revenues were more likely to use personal credit sources for financing. Owners of firms with $150,000 or less in annual revenue used personal loans, personal investment assets, loans from employees, loans from family and friends and home mortgages much more often compared to firms with higher revenues. Each of these options carries personal and reputational risk, but businesses this cash-poor often do not qualify for better options.
Financing for Navigating Economic Troubles
SMBs with access to financing are more confident in their ability to weather economic turbulence.
Having access to cash and financing means that a business can continue to pay its vendors, make payroll and cover other day-to-day functionalities, even if revenues slow down. One example of this can be seen in SMBs’ plans to navigate potential tariffs. Businesses with access to financing and cash are 23% more likely to be very confident in their ability to navigate tariffs compared to those who do not have access to financing or cash. Meanwhile, SMBs that do not have access to financing are 75% more likely to have no plan to help offset any additional costs from tariffs.
Businesses in different industries also said they would deploy different tactics to combat the adverse effects of tariffs. The retail industry is the most likely to replace foreign suppliers with domestic ones, with 36% of retailers saying they would leverage this strategy. Hotels and restaurants said they would negotiate with suppliers and use alternative materials. Professional services firms were the least likely to have a plan to respond to tariffs. However, those businesses rely the least on imported goods and are the least likely to be directly affected by the levies.
SMBs Cope With Lack of Financing
Many SMBs claim not to need financing. But they also don’t have access to it.
Businesses have many reasons for not using credit financing, ranging from high fees and interest rates (cited by 27% of survey respondents) to high repayments (17%) to concerns about data security (8%). The most oft-cited reason was lack of need. We found that 43% of SMBs that did not use any financing in the past 12 months said they did not require it. Surprisingly, 3 in 4 SMBs without any access to financing claimed they did not need it.
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Methodology
“Brewing Storm: Why 1 in 5 Smaller Businesses Without Financing Fear They May Not Survive Tariffs” is based on a survey of 560 U.S. SMBs conducted from Feb. 5, 2025, to Feb. 12, 2025. The report details the different sources those companies use for financing.
