The economic importance of small businesses cannot be overstated. They employ nearly half of private sector employees, and account for nearly two-thirds of new jobs created in the last quarter century. Their numbers continue to rise, too. According to the IRS, the applications for employer identification numbers (EINs) were 55% higher in the first half of 2023 compared to three years earlier. Financial institutions of all types and sizes have seemingly felt the pressure to find new ways to attract members of the small business market as it continues to grow in size and importance. Several fintechs have begun to diversify their product lineups to provide new solutions to the ever-growing small business market, as noted by CI’s small business research team.
Stripe, a payment-processing and e-commerce development company, offers customers in the small business space a laundry list of beneficial products and services. Among those is Atlas, a solution aimed at minimizing the complexities of creating a business in the United States. Stripe Atlas allows any online business to launch and incorporate online with a simple, straightforward process. The fintech handles everything from creating legal documents to applying for tax ID numbers. The service is available for a one-time payment and includes a plethora of tools such as bookkeeping tools, payment processing tools, and tax filing support. However, one of the biggest reasons so many entrepreneurs use Stripe Atlas is its ease and convenience. It saves both time and money, two things typically found to be in short supply when it comes to small businesses.
Besides making startup incorporation easier than ever, Stripe recently announced a new charge card program. Previously, the fintech only issued cards that could be used to spend money from a prefunded account. Now, its customers will be able to create and distribute charge cards that can spend on credit rather than using funded accounts.
Mercury, another fintech disrupting the financial industry, also has services designed to attract new small business banking customers. Mercury Raise provides startup founders at all stages with the opportunity to connect with top investors, access capital, and get guidance on fundraising and growing their startup. The fintech has worked with hundreds of startups that have received nearly $2 billion in funding. With four separate categories, startup founders at any stage can benefit. First Check provides early-stage startup support and investor intros, Seed provides an opportunity to get startups in front of top investors, Series A provides an in-person event where founders can build lasting relationships with investors and mentors, and DTC allows those with a direct-to-consumer brand to live pitch their startup in front of expert investors. Mercury’s offerings in this unique space tries to appeal to startup founders across the various stages of the startup lifecycle.
Mercury also partners with Morgan Stanley and Vanguard to offer an automated investment service, Mercury Treasury, that moves idle cash into managed money market funds. Customers who utilize this service can choose from one of five custom strategies that best suit their goals, while customizing money movement automations to ensure smooth business operations. The partnership with Morgan Stanley gives Mercury customers access to the investment bank’s portfolio management team without the need to open a new account at the firm. Mercury customers can combine the firm’s checking and savings products with the ability to earn yield on idle cash, which could be a big draw for some small business customers looking to make the most of their current cash flow.
Not to be left behind, some traditional banks have also begun looking for new ways to attract small- to medium-sized business customers.
U.S. Bank recently launched the new Commercial Rewards Card, a corporate card combined with an all-in-one travel platform. The firm mentioned its desire to attract middle-market businesses with employees who frequently travel by combining a rewards-based credit card with the ability to manage travel. The travel management is powered by TravelBank, and with this technology cardholders can book flights, rental cars, hotels, and more. Business owners are able to set budgets and approvals for each employee card, plus they will receive exclusive rates and waived booking fees.
U.S. Bank notes the card is aimed at firms with $10-150 million in annual revenue.
With the firm’s Commercial Rewards Card, business owners have the ability to automate expenses, earn rebates with low spending requirements, and customize their travel plans. TravelBank’s reporting technology allows business owners to stay on top of employee expenses as well as overall business costs.
In a time when so many business owners are focused on cutting costs and maximizing operational efficiency, U.S. Bank’s Commercial Rewards Card appears to be an appealing draw for those looking to optimize and save when it comes to employee travels.
Dallas-based Comerica Bank recently spoke with small business owners and entrepreneurs to better understand their needs. The firm wanted to hear of the resources necessary for small businesses to grow and prosper, and they soon found that one of the greatest obstacles for small business owners was space. Office space, to be exact. In response Comerica debuted CoWorkSpaces, which provides customers of the firm with free, fully equipped office spaces. In just one location, Comerica customers can grab a desk or conference room, connect to fast internet, work remotely, and hold meetings with business partners, clients, and other fellow entrepreneurs.
The firm offers a variety of spaces at their CoWorkSpaces. The Private Space offers a closed environment, while the Common Space features an open floor plan of desks, office chairs, and monitors for work solo or in teams. The Conference Space, designed for larger groups and meetings, includes a large digital monitor, useful for video calls. Customers worried about confidential documents need not worry, as each CoWorkSpaces location includes a safe and secure shredding site. The Community Space, the largest work area in the location, is available not only to customers of the firm but to the greater community as well. Local non-profits can reserve these spaces for free to host events and larger meetings.
To learn more about small business banking industry trends and changes, see our small business banking research services page. And for more best practices and the latest trends from across financial services and healthcare, check back regularly for more Insights.