SMB Finances and Funding Report 2018

Small business owners were in a very good mood last year. From increased optimism about their business health to a stronger focus on work-life balance, American entrepreneurs were looking at 2018 with more excitement than anxiety.

That’s just one of the findings revealed in Credibly’s inaugural SMB Forecast Report, which polled business owners on everything from their hiring outlook and future revenue expectations to their experiences seeking funding and even the impact of current events on their business.

This survey was conducted from December 2017 through January 2018 and collected responses from 343 U.S.-based small-and medium-sized business (SMB) owners who had previously secured business funding through Credibly. So what did we learn? Read on to find out…

Key Insights:

  • Over two-thirds of business owners were more optimistic about the future of their business now compared to last year.
  • Operating expenses and working capital were the most common financial challenges for business owners in 2017.
  • 62.5% of respondents did not seek a traditional bank loan before securing funding through alternative lending.
  • More than one-fifth of respondents said that spending more time with family was a top goal for 2018.
  • 26.2% of respondents reported that extreme weather affected their businesses over the past year.

The Basics

If your business is small and stable, you’re in good company. Over half of SMB owners who completed the survey (54.7%) have been in business for 10 years or more, and the largest percentage of respondents (45.5%) identified as having annual revenue as less than $500,000.

What was your annual revenue?

How long have you been in business?

Financial Health:

2017 was a very prosperous year for business owners, as over two-thirds of the survey respondents (67.4%) reported that their revenue increased over the past year. Only 8.9% reported that their revenue suffered a decrease.

Annual Revenue Change

When asked what their greatest financial challenges in 2017 were, the two most common responses were “Managing operating expenses or working capital” (39.5%) and “Credit availability or securing additional funds” (34.1%). “Payments on debt” came in third at 28.7%. (Note: Respondents were allowed to choose more than one response for this question.)

What were your greatest financial challenges?


The majority of survey respondents (54.1%) run modestly sized operations with one to five employees. Only 42.3% reported that they increased the size of their employee roster over the past year, and 11.3% actually decreased the number of workers they employ. (The remaining 46.4% said they employed the same number of people as the previous year.)

Still, SMBs expect to hire more actively in 2018. 59.2% of those surveyed said they plan to increase the number of people they employ in the coming year, while nearly all of the remaining respondents (40.4%) planned to keep their workforce at the same level.

YoY employee change upcoming year

And there’s more good news: Most respondents (66.1%) plan to increase compensation for their workers in the coming year, while only 0.9% anticipated that they’d have to pay their employees less.

Employee wage increase?


Over the last few decades, traditional credit markets have not been a practical financing option for many SMB owners, who often need immediate access to relatively small amounts of capital.

Traditional bank loans tend to take 90-120 days for funds to become available, and most require business owners to seek at least $250,000 in financing — which makes these loans a non-starter for the small business owner who needs $20,000 to replace a critical piece of equipment or pursue an unexpected opportunity.

As a result, bank loans are no longer viewed as the first option for business owners in need of funding. According to our survey, a majority of business owners (62.5% of respondents) did not seek a traditional bank loan before securing funding through alternative lending.

Did you seek a traditional bank loan first?

And while a large proportion of those surveyed (48.6%) reported that they simply didn’t qualify for bank funding, the lengthy time to funding of traditional bank loans was the deciding factor for 32.2% of respondents. About one-tenth of SMB owners (10.2%) avoided traditional bank funding because the process was confusing or required too much effort, while a slightly smaller percentage (9.0%) reported that banks offered unappealing terms.

Why did you choose alternative lending?

In terms of funding size, just over half of survey respondents (50.5%) sought less than $50,000 when seeking financing. 26.3% were looking for funding in the range of $50,000 to $100,000, and 15.8% were looking for larger funding between $100,000 and $250,000; only 7.4% of respondents sought funding amounts of $250,000 or more.

How much funding did you seek?

And what were these SMB owners ultimately using the funds for? “Increase working capital” was by far the most popular response, with 50.5% of respondents citing it as a primary use of funds. (Note: Respondents were allowed to choose more than one response for this question.) The second and third most popular responses were “Purchase new equipment” (30.0%) and “Purchase inventory” (28.6%), suggesting that business financing is most often needed to sustain daily operations, rather than for longer-term strategic purposes like business expansion, hiring, or marketing.

What did you use the capital for?

Finally, 23.1% of survey respondents reported their FICO scores as being in the highest bracket of 700 and over — a cohort of borrowers that certainly could qualify for traditional loans, but are choosing alternative capital sources instead for the advantages in speed and funding size.


Optimism is on the rise among SMB owners — a sentiment that is generally associated with a strong economy and growing consumer confidence. In fact, the Small Business Optimism Index set a record high in January 2018, with a full 32% of owners reporting that now is a good time to expand their businesses.

According to Credibly’s survey, 68.8% of business owners reported that they are more optimistic about the future of their business now compared to last year. Only 5.4% of respondents claimed to be less optimistic about their prospects in 2018.

How optimistic are you about your business in the future compared to last year?

Those numbers track closely with SMB owners’ feelings about the economy in general. A combined 61.1% of survey respondents said they were “optimistic” or “very optimistic” about the economy. Once again, just 5.4% reported that they were “not optimistic” about the state of the economy.

How optimistic are you about the economy?

These high levels of optimism also come with a stronger emphasis on work/life balance as more than one-fifth of respondents (22.1%) said that spending more time with family was their top priority for 2018. The focus on improving their own lifestyle was also reflected in their responses as 9.7% of SMB owners consider increasing their own salary a top goal for 2018.

The most popular response to the “top priority” question was, perhaps unsurprisingly, “increase revenue,” which was selected by 37.9% of respondents. Coming in second place, 33.9% of SMB owners reported having “no goals” as their top priority for 2018 — which is itself a sign that business owners are feeling less pressure these days.

Top goals & plans for 2018


Having a new president at the helm has encouraged many business owners, with 41.7% of survey respondents saying that President Donald Trump’s tenure has been helpful to their business, compared to just 20.2% who consider it to be harmful. (38.1% reported that the Trump presidency hasn’t affected their business one way or the other.)

Among many newsworthy events last year, 2017 was marked by a series of devastating natural disasters that ravaged American businesses, including Hurricane Harvey in August and the California wildfires in October. The effects were felt by a significant portion of business owners, as 26.2% of respondents reported that extreme weather affected their businesses over the past year.

Has weather or natural disasters affected your business?

Effect of Immigration Policy?


Enduring the peaks and valleys of business ownership is always a challenge for SMB owners. Fortunately, the current economic landscape seems to be on an upswing, and businesses of all kinds are riding the wave.

Do the results of this year’s SMB Forecast Report match your own experiences as a business owner over the last year, or your expectations for the remainder of 2018? How optimistic are you about the year ahead? Please tweet your feedback to @Credibly360 and let us know how you’re feeling.

For inquiries about this survey’s results and methodology, contact For information on acquiring affordable and flexible funding for your own small- or medium-sized business, please visit