New report: The financial health of small businesses
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New report: The financial health of small businesses

In collaboration with the Financial Health Network [formerly the Center for Financial Services Innovation (CFSI)], we are pleased to present the initial findings of our Small Business Financial Health Survey. Accion Opportunity Fund, including our lending arm Opportunity Fund, and FHN are committed to building a more robust and inclusive financial marketplace for both consumers and small business owners. Together, we set out to gain a better understanding of the specific challenges facing entrepreneurs and to gauge which issues made them and their businesses financially vulnerable.

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The Financial Health Network, the leading consumer financial health research organization, developed a Financial Health Score for consumers based on eight indicators of financial health and released its baseline U.S. Financial Health Pulse report in 2018. Building on its consumer research expertise, CFSI developed similar indicators of financial health for small businesses. As a Financial Health Network member, Accion Opportunity Fund joined this initiative to survey small business owners about their financial practices and habits last fall.

Accion Opportunity Fund clients received a short web-based survey about their businesses’ financial position, ability to re-pay debt, ability to withstand an unexpected expense, and other financial health indicators.


We received responses from 80 business owners. The findings reveal that while respondents are confident about their business’s long-term profitability and ability to manage debt, many do not have adequate cash reserves to withstand a financial shock to their business.

Specific findings include:

  • Businesses are succeeding. Over 80% of the businesses reported they were at a profit (53%) or break-even (30%) at the end of 2017.
  • Confidence about the future. Over 95% of respondents expressed confidence in their business’ long-term profitability.
  • Our clients are on top of their bills—both payable and receivable. Three-quarters of respondents pay most or all of their business expenses on time; nearly all (97%) know who owes their business money and when it is due.
  • Our borrowers have a manageable amount of debt. 80% of owners said their business has a manageable amount of debt (66%) or no debt (14%).
  • But they don’t have adequate savings. 41% of respondents have less than one month of cash on hand. 42% have 1-3 months of cash on hand.
  • Most aren’t well-prepared for the unexpected. In case of a large, unexpected business expense, nearly half of respondents (48%) stated that they would need to borrow money to pay it (including credit card, business loan, line of credit, or borrowing from family). Only 20% said they could cover such an expense with cash or savings on hand, with an additional 19% stating that they would use personal funds. And 13% said they weren’t sure what they would do to pay such an expense.

These findings parallel, in many ways, what we learned from Opportunity Fund and Accion’s national longitudinal impact study, published last spring. In that study, most of our entrepreneurs stated that they were able to meet their debt obligations and were comfortable with their level of debt, but most also lacked sufficient cash reserves to withstand a financial emergency. While many of these small business owners reported increased savings during the course of the study, cash flow volatility remains a significant barrier to saving and planning for the future.

Applying these findings

We are committed to providing affordable, appropriate credit that enables small business owners to improve their business’s financial health. This survey serves as an important baseline of understanding our borrowers’ financial strengths, as well as where they are most vulnerable, so that we may continue offering diverse financial products and providing access to relevant resources to help small business owners succeed.

For more details on the Small Business Financial Health Survey, check out the full publication here!

Originally posted in 2019 and updated to reflect organizations’ new names.

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