For community banks, small- and medium-sized businesses (SMBs) represent a potentially lucrative opportunity for growth. By expanding beyond consumer accounts, banks can reduce risk through diversification, while adding new revenue streams that support growth.
In today’s landscape of rising competition, economic uncertainty and complex business needs, it’s crucial to assess whether your current product/service mix and future roadmap are designed with small businesses in mind. Identify any potential gaps and then decide whether it makes sense to build, buy or partner to fill them.
Through this approach, your bank will be empowered to offer a full range of solutions that today’s businesses need to do business.
Assessing the SMB market
Small businesses serve a vital role as a major driver of the U.S. economy.
According to the U.S. Small Business Administration (SBA), the 36 million SMBs in the U.S. represent 99.9% of all businesses. SMBs also employ 62.3 million people, more than 45% of the U.S. private workforce.
SMBs generate a massive amount of economic output, comprising roughly 43.5% of U.S. Gross Domestic Product (GDP). Moreover, small firms (those with fewer than 250 employees) accounted for nearly 53% of net new job creation between 2021 and 2024.
And despite an uncertain economic environment in the short term, SMBs are feeling largely optimistic about their futures. According to a November 2025 report from Bank of America, nearly 6 in 10 plan to expand their businesses in 2026, presenting banks with an amazing opportunity to offer financing and other services.
The SMB segment is not only large — it’s expanding and resilient, even amid inflation, labor shortages and ongoing rate pressures.
SMB needs are complex and evolving
But the SMB landscape is changing rapidly and is increasingly becoming more digital.
The SMB market is fragmenting into microbusinesses, solopreneurs and digital-first operators. In fact, more than 8 in 10 small businesses can be considered solopreneurs, self-employed professionals or non-employer firms. Many of these owners and operators feel underserved, if not outright ignored by incumbent financial institutions. Traditional offerings like checking accounts and conventional lending products no longer fully meet their needs, at least as standalone products. The opportunity is ripe for community banks to offer emerging services like embedded payments and digital onboarding.
SMBs of all stripes face increasing complexity from regulation, competitive pressures (especially from online businesses that can offer cheaper, faster alternatives) and consumer preferences.
For these reasons, many SMBs are looking to deliver a digital customer experience, often leveraging automation and AI. They’re also seeking to simplify and seamlessly integrate their tech stacks. The last thing they want is to implement yet another point solution to solve a single problem. They don’t want to have to interact with multiple software providers to integrate complex systems on the fly.
Instead, these overworked and under-resourced entrepreneurs are seeking simple solutions to their operational and financial pain points. They desire integrated, embedded financial workflows that include payments, invoicing, cash flow and data analysis, all in one convenient, affordable package.
Typically, business owners and founders excel at one specific thing, whether that’s innovating a unique product, meeting the needs of a niche market or providing outstanding service to their customers. They rarely have the time or patience to navigate complex financial products.
That’s where they are looking to your bank for guidance.
For banks, a diversified portfolio offers benefits
As a community bank, you already understand the benefits of offering a comprehensive suite of small business financial products. Diversifying your balance sheet across different revenue streams helps reduce interest rate, credit and income risk.
SMB offerings help banks capture more ancillary fees, reducing your reliance on net interest income. And since many of your current retail customers likely have their own small businesses (whether it’s a side hustle, home-based business or something more), offering these solutions helps create stickier, longer-lasting relationships with your existing customer base.
But you can’t simply offer checking accounts and business loans. Those products are table stakes — the bare minimum of what every owner or manager needs to operate and grow their business. SMBs are looking for more: a fully integrated, full-featured suite of services that meet their most urgent financial needs. Such packages should include:
- Payments and debit/credit card services
- Card processing/merchant services
- Digital financial management tools
- Cash/treasury management services
- Embedded finance capabilities
And you need to offer it all under one roof!
Maximizing the SMB opportunity
Maximizing your SMB opportunity begins with understanding your bank’s “sweet spot.”
Begin by asking questions such as: “What do we do really well?” “What do our customers most appreciate about our service offerings?” and “How do these attributes align with the needs of SMBs?”
Next, it’s time to conduct a deep analysis of your current customer base. If you already offer business accounts and loans, analyze your business customer base and segment it based on demographic, psychographic and behavioral data. Don’t forget your retail customer base; many already use their consumer accounts and digital services to run a small business.
Armed with this valuable data, you can develop a comprehensive, coherent strategy for addressing the SMB market.
Increasingly, community banks should consider partnering with a comprehensive, integrated provider ecosystem to offer SMBs the services they need to successfully run their businesses. By tapping into this resource, smaller, community-focused financial institutions can compete with even the largest banks and digitally native fintechs.
Key services to look for include credit and debit card production and support, digital payment enablement and loyalty programs. Banks can also benefit from a web-based business card management tool that gives both banks and their business clients access to smarter card management resources, data, reporting, insights and process automation. A modern business card management platform helps community banks empower their business accountholders to manage their card accounts using current platforms, delivering real-time reporting daily, weekly or monthly.
Serving the SMB market offers many benefits, including opportunities for portfolio growth, income diversification and risk mitigation. But to make the most of these opportunities, community banks should look to offer a range of solutions that meet business owners’ complex and evolving needs.
Work with an industry partner that offers a robust, fully integrated provider ecosystem designed for small businesses. It will help position your bank as the comprehensive, go-to resource for all the guidance and financial services that SMBs need.
To learn more about our SMB solutions for banks, please visit primax.us or contact your Primax representative at (866) 820-5400.
