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Marketing Financial Services to Small Businesses - US - July 2014

“The strengthening economy is paving the way for small business growth, both because loans are becoming more plentiful and consumers have become more willing to spend. Offering superior customer service and state-of-the-art technology will be crucial in financial services institutions’ efforts to take advantage of the growing strength of the sector and attract small business customers.”
– Robyn Kaiserman, Financial Services Analyst

This report answers the following questions:

  • Help your customers, help your bank?
  • How can banks increase business credit card usage?
  • Mobile apps for small businesses?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Data sources
        • Consumer survey data
          • Direct marketing creative
            • Abbreviations and terms
              • Abbreviations
                • Terms
                • Executive Summary

                    • The market
                      • The target market: 28 million small businesses in the US
                        • Figure 1: Employment size of employer and non-employer firms in US, 2011
                      • Value of small business loans has fallen
                        • Figure 2: Aggregate value of small business loans of less than $1 million, 2009-12
                      • Alternative sources of lending are challenging the banks
                        • Market drivers
                          • Inflation
                            • Figure 3: US Inflation rate January 2013-May 2014
                          • Big banks are lending again
                            • Figure 4: Small business loan approval rates by big banks, May 2013-May 2014
                          • Companies and brands
                            • Figure 5: Top 10 SBA 7(a) lenders 2013 ($1 million and under)
                          • The consumer
                            • Most small businesses are operated from the owner’s home
                              • Figure 6: Business ownership, by annual revenues, April 2014
                            • Opportunity to increase share of wallet through product bundling
                              • Figure 7: Business banking products owned, April 2014
                            • Greater dissatisfaction among micro businesses
                              • Figure 8: Satisfaction with customer service, by annual revenues, April 2014
                            • Greater investment needed in mobile technology
                              • Figure 9: Satisfaction with primary bank’s mobile capabilities, by age, April 2014
                            • What we think
                            • Issues and Insights

                                • Help your customers, help your bank?
                                  • Issues
                                    • Implications
                                      • How can banks increase business credit card usage?
                                        • Issues
                                          • Implications
                                            • Mobile apps for small businesses?
                                              • Issues
                                                • Implications
                                                • Trend Application

                                                    • Trend: The Unfairer Sex
                                                      • Trend: Entrepreneurial Spirit
                                                        • Mintel Futures: Access Anything
                                                        • Market Size

                                                          • Key points
                                                            • Size of the small business sector
                                                              • Figure 10: Employment size of employer and non-employer firms in US, 2011
                                                            • Three quarters of small businesses have a dedicated business checking account
                                                              • Figure 11: Business banking products owned, by gender, April 2014
                                                            • Lending is key to small business growth
                                                              • Figure 12: Aggregate value of small business loans of less than $1 million, 2009-12
                                                              • Figure 13: Top 10 SBA 7(a) lenders 2013 ($1 million and under)
                                                          • Market Drivers

                                                            • Key points
                                                              • The US economy has not yet fully rebounded
                                                                • Unemployment
                                                                  • Figure 14: US Unemployment rate, May 2009-May2014
                                                                • Inflation
                                                                  • Figure 15: US Inflation rate January 2013-May 2014
                                                                • Legislation affecting small businesses
                                                                  • ACA
                                                                    • Minimum wage legislation
                                                                      • Small business loan approval rates by big banks are on the rise
                                                                        • Figure 16: Small business loan approval rates, May 2013-May 2014
                                                                      • Small business optimism is increasing
                                                                        • Figure 17: NFIB Small Business Optimism index, January 2009-May 2014
                                                                      • A third of small business owners say their finances have improved
                                                                        • Figure 18: Attitudes toward own business finances, April2014
                                                                    • Competitive Context

                                                                      • Key points
                                                                        • Alternative lenders on the rise
                                                                          • Peer-to-peer lending
                                                                          • Innovations and Innovators

                                                                            • Key points
                                                                              • SmartBiz
                                                                                • Square offers loans
                                                                                  • PNC upgrades its digital tools for small business
                                                                                    • New developments in mobile apps for small businesses
                                                                                    • Marketing Strategies

                                                                                      • Key points
                                                                                        • Overview
                                                                                          • Brand analysis: Wells Fargo
                                                                                            • Figure 19: Brand analysis of Wells Fargo, 2014
                                                                                          • Online
                                                                                            • Online ads
                                                                                              • Figure 20: Wells Fargo Works online ad, 2014
                                                                                              • Figure 21: Wells Fargo Works online ad, 2014
                                                                                              • Figure 22: Wells Fargo small business in Charlotte, N.C., online ad, 2013
                                                                                            • Social media
                                                                                              • Figure 23: Wells Fargo Works video, 2014
                                                                                            • Direct mail
                                                                                              • Figure 24: Wells Fargo Business Services Packages Checking Account, 2014
                                                                                              • Figure 25: Wells Fargo business credit card ad, 2014
                                                                                            • Brand analysis: Bank of America
                                                                                              • Figure 26: Brand analysis of Bank of America, 2014
                                                                                            • Online
                                                                                              • Social media
                                                                                                • YouTube
                                                                                                  • Figure 27: Bank of America Alex and Ani video, 2014
                                                                                                • Direct mail
                                                                                                  • Figure 28: Bank of America business rewards credit card direct mail ad, 2014
                                                                                                  • Figure 29: Bank of America remote deposit direct mail ad, 2014
                                                                                                  • Figure 30: Bank of America account management tools direct mail ad, 2014
                                                                                                • Brand analysis: JPMorgan Chase
                                                                                                  • Figure 31: Brand Analysis, Chase, 2014
                                                                                                • Online
                                                                                                  • YouTube
                                                                                                    • Figure 32: Chase Platinum Business Banking video, 2014
                                                                                                  • Mobile
                                                                                                    • Figure 33: Chase Sponsor of National Small Business Week mobile ad, 2014
                                                                                                    • Figure 34: Chase Ink mobile ad, 2013
                                                                                                  • Direct mail
                                                                                                    • Figure 35: Chase Platinum Business Checking account direct mail ad, 2014
                                                                                                  • Print
                                                                                                    • Figure 36: Chase Ink card print ad, 2014
                                                                                                  • Alternative lenders
                                                                                                    • OnDeck
                                                                                                      • Figure 37: OnDeck small business loan direct mail ad, 2014
                                                                                                      • Figure 38: OnDeck small business loan mobile ad, 2014
                                                                                                      • Figure 39: OnDeck small business loans online ad, 2014
                                                                                                    • Swift Capital
                                                                                                      • Figure 40: Swift Capital small business loan direct mail ad, 2014
                                                                                                  • Who are the Business Owners?

                                                                                                    • Key points
                                                                                                      • Most businesses operate from home
                                                                                                        • Figure 41: Business ownership, by gender and age, April 2014
                                                                                                      • The large majority of smaller firms are run from home
                                                                                                        • Figure 42: Business ownership, by annual revenues, April 2014
                                                                                                      • Nine in 10 sole operators work from home
                                                                                                        • Figure 43: Business ownership, by number of employees, April 2014
                                                                                                    • How Many Employees Do They Have?

                                                                                                      • Key points
                                                                                                        • Most small business owners employ only themselves
                                                                                                          • Figure 44: Number of paid employees, by gender, April 2014
                                                                                                        • Opportunity for banks to support post-retirement entrepreneurs
                                                                                                          • Figure 45: Number of paid employees, by age, April 2014
                                                                                                        • Midsized businesses may need support from insurance agents
                                                                                                          • Figure 46: Number of paid employees, by annual revenues, April 2014
                                                                                                        • Nine in 10 home-operated businesses have fewer than five employees
                                                                                                          • Figure 47: Number of paid employees, by operation at home/outside, April 2014
                                                                                                      • How Much Revenue Do They Earn?

                                                                                                        • Key points
                                                                                                          • Women-owned businesses tend to generate less revenue
                                                                                                            • Figure 48: Annual revenue, by gender, April 2014
                                                                                                          • Relatively few over-65s own larger “small” businesses
                                                                                                            • Figure 49: Annual revenue, by age, April 2014
                                                                                                          • Strong link between employees and turnover
                                                                                                            • Figure 50: Annual revenue, by number of employees, April 2014
                                                                                                            • Figure 51: Number of paid employees, by operation at home/outside, April 2014
                                                                                                        • Company Industry

                                                                                                          • Key points
                                                                                                            • Professional services most popular industry
                                                                                                              • Figure 52: Company industry, by gender, April 2014
                                                                                                            • Professional service firms dominate regardless of company size
                                                                                                              • Figure 53: Company industry, by annual revenues, April 2014
                                                                                                          • How Companies Pay for Purchases

                                                                                                            • Key points
                                                                                                              • Rent and/or utilities
                                                                                                                • Figure 54: How companies pay for rent and/or utilities, by gender, April 2014
                                                                                                                • Figure 55: How companies pay for rent and/or utilities, by age, April 2014
                                                                                                              • Greater professionalism among larger business owners
                                                                                                                • Figure 56: How companies pay for rent and/or utilities, by annual revenues, April 2014
                                                                                                                • Figure 57: How companies pay for rent and/or utilities, by number of employees, April 2014
                                                                                                                • Figure 58: How companies pay for rent and/or utilities, by operation from home or outside, April 2014
                                                                                                              • Day-to-day supplies
                                                                                                                • Figure 59: How companies pay for day-to-day supplies, by gender, April 2014
                                                                                                                • Figure 60: How companies pay for day-to-day supplies, by age, April 2014
                                                                                                              • A chance to use retailer loyalty programs to build partnerships with smaller businesses
                                                                                                                • Figure 61: How companies pay for day-to-day supplies, by annual revenues, April 2014
                                                                                                                • Figure 62: How companies pay for day-to-day supplies, by operation from home/outside, April 2014
                                                                                                              • Major purchases
                                                                                                                • Figure 63: How companies pay for major purchases (over $1,000), by gender, April 2014
                                                                                                              • Older business owners more likely to pay with a personal credit card
                                                                                                                • Figure 64: How companies pay for major purchases (over $1,000), by age, April 2014
                                                                                                                • Figure 65: How companies pay for major purchases (over $1,000), by annual revenues, April 2014
                                                                                                                • Figure 66: How companies pay for major purchases (over $1,000), by operation from home/outside, April 2014
                                                                                                            • How Owners Fund Their Businesses

                                                                                                              • Key points
                                                                                                                • Startup funding
                                                                                                                  • Figure 67: Method of funding startup, by gender, April 2014
                                                                                                                • Younger business owners more likely to look to family for support
                                                                                                                  • Figure 68: Method of funding startup, by age, April 2014
                                                                                                                • Loans key to funding larger startups
                                                                                                                  • Figure 69: Method of funding startup, by annual revenues, April 2014
                                                                                                                • Funding growth
                                                                                                                  • Figure 70: Method of funding growth, by gender, April 2014
                                                                                                                  • Figure 71: Method of funding growth, by age, April 2014
                                                                                                                • Larger firms have outgrown informal funding sources
                                                                                                                  • Figure 72: Method of funding growth, by annual revenues, April 2014
                                                                                                                  • Figure 73: Method of funding growth, by number of employees, April 2014
                                                                                                              • Attitudes Toward Own Business Finances

                                                                                                                • Key points
                                                                                                                  • Customer satisfaction is low, but many are optimistic
                                                                                                                    • Figure 74: Attitudes toward own business finances, by gender, April 2014
                                                                                                                    • Figure 75: Attitudes toward own business finances, by age, April 2014
                                                                                                                  • Larger businesses are significantly more optimistic
                                                                                                                    • Figure 76: Attitudes toward own business finances, by annual revenues, April 2014
                                                                                                                  • Size adds to a business’s banking requirements
                                                                                                                    • Figure 77: Attitudes toward own business finances, by operation from home/outside, April 2014
                                                                                                                • Business Banking Products and Services

                                                                                                                  • Key points
                                                                                                                    • Most have at least a business checking account
                                                                                                                      • Figure 78: Business banking products owned, by gender, April 2014
                                                                                                                    • Younger business owners need to invest in their retirement, not just their business
                                                                                                                      • Figure 79: Business banking products owned, by age, April 2014
                                                                                                                    • There is room for a “starter” business account
                                                                                                                      • Figure 80: Business banking products owned, by annual revenues, April 2014
                                                                                                                    • Additional staff adds complexity to banking requirements
                                                                                                                      • Figure 81: Business banking products owned, by number of employees, April 2014
                                                                                                                      • Figure 82: Business banking products owned, by operation from home/outside, April 2014
                                                                                                                  • Mobile Device Ownership

                                                                                                                    • Key points
                                                                                                                      • Mobile device ownership is prevalent among small business owners
                                                                                                                        • Figure 83: Mobile device ownership, by gender, April 2014
                                                                                                                        • Figure 84: Mobile device ownership, by age, April 2014
                                                                                                                        • Figure 85: Mobile device ownership, by annual revenues, April 2014
                                                                                                                    • Usage of and Satisfaction with Mobile Banking

                                                                                                                      • Key points
                                                                                                                        • Mobile banking usage is very low
                                                                                                                          • Figure 86: Mobile business banking usage, by gender, April 2014
                                                                                                                      • Appendix – Other Useful Consumer Tables

                                                                                                                        • Company industry
                                                                                                                          • Figure 87: Company industry, by age, April 2014
                                                                                                                          • Figure 88: Company industry, by number of employees, April 2014
                                                                                                                          • Figure 89: Company industry, by operation from home/outside, April 2014
                                                                                                                        • How companies pay for purchases
                                                                                                                          • Day-to-day supplies
                                                                                                                            • Figure 90: Method of purchase payment for day-to-day supplies, by number of employees, April 2014
                                                                                                                          • Major purchases
                                                                                                                            • Figure 91: How companies pay for major purchases (over $1,000), by number of employees, April 2014
                                                                                                                          • How owners fund their business
                                                                                                                            • Startup
                                                                                                                              • Figure 92: Method of funding startup, by number of employees, April 2014
                                                                                                                              • Figure 93: Method of funding startup, by operation from home/outside, April 2014
                                                                                                                            • Growth
                                                                                                                              • Figure 94: Method of funding growth, by operation from home/outside, April 2014
                                                                                                                            • Attitudes toward business/finances
                                                                                                                              • Figure 95: Attitudes toward own business finances, by number of employees, April 2014
                                                                                                                            • Mobile device ownership
                                                                                                                              • Figure 96: Mobile business banking usage, by number of employees, April 2014
                                                                                                                              • Figure 97: Mobile business banking usage, by operation from home/outside, April 2014
                                                                                                                            • Usage of and satisfaction with mobile banking
                                                                                                                              • Figure 98: Usage of and satisfaction with mobile business banking, by age, April 2014
                                                                                                                              • Figure 99: Usage of and satisfaction with mobile business banking, by annual revenue, April 2014
                                                                                                                              • Figure 100: Usage of and satisfaction with mobile business banking, by number of employees, April 2014
                                                                                                                              • Figure 101: Usage of and satisfaction with mobile business banking, by operation from home/outside, April 2014
                                                                                                                          • Appendix – Trade Associations

                                                                                                                            Companies Covered

                                                                                                                            To learn more about the companies covered in this report please contact us.

                                                                                                                            Marketing Financial Services to Small Businesses - US - July 2014

                                                                                                                            £3,277.28 (Excl.Tax)