Small Business Owners Are Not as Financially Prepared as They May Think, According to TD Bank Survey

Vast majority (82%) of small business owners indicate that they are likely to consider applying for a loan or line of credit but overlook the value of expert financial advice

Across the U.S., at a baseline, nearly all (94%) small business owners (SBOs) believe that their company is financially prepared for the next 12 to 18 months. But peel back the layers, and SBOs may not actually be as ready as they imply. Nearly three-fourths (72%) of owners believe they can withstand revenue shortfalls for just two quarters – or less – before becoming concerned about the future of their business – and 43% of owners said their business would not survive if they fell short on revenue for three to four months. This is according to TD Bank's inaugural Financial Preparedness Survey: Small Businesses Owners' Report, which surveyed U.S. small business owners' current confidence in their financial preparedness.

"Now, more than ever, it is critical for business owners to be financially prepared," said Andy Bregenzer, Co-Head of U.S. Commercial Banking at TD Bank. "Business owners who invest the time to create a financial plan will be better positioned to face challenges and seize new opportunities. Financial preparedness is not just about business survival but also about positioning your business to grow with confidence no matter what the future holds."

SBOs: Don't get ready, stay ready

Luckily, financial preparedness is top of mind for SBOs, with nearly all respondents (99%) assessing their financial preparedness quarterly or more frequently. Cash flow is key, with more than half (52%) saying a positive cash flow is an indicator of financial preparedness, while 37% believe it's having enough capital to weather emergencies.

To support their financial preparedness goals over the next year and a half, a vast majority (82%) of SBOs indicate that they are likely to consider applying for a loan or line of credit. The top goals for this loan or line of credit include maintaining company operations (38%), undertaking a significant financial technology upgrade or overhaul (33%), expanding into new market verticals (33%), and making payroll (32%). The majority (87%) are confident their applications will be approved.

Ask the Experts

To support their financial goals, owners acknowledge the importance of financial guidance and are seeking financial advice on best practices for running their business. However, less than half (46%) are turning to a banking or financial partner. 45% of SBOs are consulting other small business owners and another 30% are utilizing generative AI tools like ChatGPT.

"Small business owners don't have to face challenges alone. Bankers are true small business experts – we've seen it all, and we know how to help. SBOs who are going at it alone are leaving good advice – and potential opportunities – on the table," said Bregenzer.

What's the currency of business? Trust.

Trusted financial partners like TD Bank, can offer guidance as small businesses navigate shifting economies. This includes education on financial resources and types of funding, like access to SBA loans, asset-based lending and flexible lines of credit, to support both longer-term purchases and day-to-day operations. In times of uncertainty and frequent change, access to lines of credit enable business owners to respond swiftly.

One such client is the attorney and real estate developer duo of Eric Jenkins and Earle Horton, who envisioned turning a historic building on Washington, D.C.'s former Walter Reed Army Medical Center campus into a neighborhood hardware store, café, and offices. This ambitious project to create Hazel's Hardware and cafe, required an innovative blend of New Markets Tax Credits (NMTC) with a U.S. Small Business Administration (SBA) construction-to-permanent loan — a combination most banks couldn't structure.

"TD's ability to coordinate multiple funding sources made the complex project feasible. There were half a dozen times when TD could have walked away from this deal, but they didn't," says Eric Jenkins. "Unlike other banks, TD stood out as having the resources to provide the solutions we needed. They had a super-strong SBA team plus a super-strong New Markets Tax Credit team, which was exactly what we needed."

Beyond financial offerings, banking partners also serve as a key knowledge source. By understanding the structure of small businesses and their ongoing business relationships, banking partners help owners identify opportunities for growth and capitalize on them quickly.

"Despite continued concerns about economic pressures, interest rates and inflation, small business owners prove time and time again that they're a resilient group – SBOs are optimistic about their success, they work hard for it, and they deserve a trusted banker who will navigate uncertainty alongside them," said Bregenzer.

Survey Methodology

Wakefield Research conducted the Financial Preparedness Survey: Small Businesses Owners' Report, among small business owners (100 employees or fewer), with revenues of $100,000+ annually, 250 nationwide respondents and 150 respondents in each of the following regions: New York City, Boston, Washington D.C., South Florida and Greater Philadelphia, between March 7th and March 20th, 2025, using an email invitation and an online survey.

About Wakefield Research

Wakefield Research is a leading, independent provider of quantitative, qualitative, and hybrid market research for thought leadership and strategic insights. Wakefield Research is a partner to the world's leading brands and agencies, including 50 of the Fortune 100. We conduct research in nearly 100 countries and our surveys appear regularly in top-tier media. Learn more at www.wakefieldresearch.com.

About TD Bank, America's Most Convenient Bank®

TD Bank, America's Most Convenient Bank, is one of the 10 largest banks in the U.S. by assets, providing over 10 million customers with a full range of retail, small business and commercial banking products and services at more than 1,100 convenient locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. In addition, TD Auto Finance, a division of TD Bank, N.A., offers vehicle financing and dealer commercial services. TD Bank and its subsidiaries also offer customized private banking and wealth management services through TD Wealth®. TD Bank is headquartered in Cherry Hill, N.J. To learn more, visit www.td.com/us. Find TD Bank on Facebook at www.facebook.com/TDBank and on Instagram at www.instagram.com/TDBank_US/.

TD Bank is a subsidiary of The Toronto-Dominion Bank, a top 10 North American bank. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol "TD". To learn more, visit www.td.com/us.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250501575848/en/

Media:

Oindrila Hazra

TD Bank

Corporate Communications Manager II – Commercial and Small Business Banking

[email protected]