How credit unions can better serve SMBs by offering digital products and services.

For many small businesses (SMB), managing cash flow is a constant struggle. Small business owners often wrestle with unpredictable income streams, delays in accounts receivable, and limited access to real-time financial insights. These challenges can leave them vulnerable to unexpected shortfalls that can stifle growth and even threaten survival.

The ecosystem of providers helping SMBs manage these challenges is growing. This growth signals the beginning of a deeper partnership between small businesses and traditional financial institutions, two vital sectors of the U.S. economy. At the same time, a rising crop of small fintech companies is introducing highly targeted, tech-forward tools designed to streamline cash flow management and enhance customer engagement – raising the stakes for everyone in the space.

Yet, despite fintechs’ rapid growth, traditional financial institutions remain central to SMB banking relationships. In fact, 23% of U.S. SMBs report using a local bank or credit union as their primary financial institution; another 16% say they’re likely to switch to one within five years. This signals a clear opportunity for credit unions to compete by combining their community focus with modern digital capabilities.

Four ways credit unions can empower small businesses 

Credit unions and SMBs make a great match. For the small business owner, a credit union provides a level of attention that larger financial institutions can’t provide; for the credit union, SMBs align with the mission of fostering community and supporting local economies. To make this match work, credit unions have to win SMB business by offering products that can compete with those offered by larger financial institutions. Here are four ways to do that.

1. Meet a critical member need

The most fundamental way to build loyalty is to solve a member’s most pressing problem. For SMBs, that is often cash flow uncertainty. By providing tools that help business owners predict cash flow gaps, simplify invoice tracking, and manage payables more efficiently, a credit union becomes an indispensable partner, elevating the relationship from purely transactional to deeply consultative.

Small businesses also face increasing risks from payments fraud, which can disrupt cash flow, erode trust, and result in significant financial losses. Unlike larger enterprises, SMBs often lack dedicated resources to detect and prevent fraudulent activity, making them attractive targets for cybercriminals. For credit unions, offering secure, fraud-resistant payment solutions is essential to protecting members and supporting their long-term success. 

Building on that foundation, credit unions can also help SMBs accelerate the movement of money. Addressing cash flow uncertainty isn’t just about planning - it’s about speed. Offering integrated solutions for payables and receivables alongside options for faster access to funds creates a powerful combination. Dedicated P2P payment capabilities give small businesses the ability to receive payments from customers and partners nearly instantly, reducing delays that often strain liquidity. Combined with emerging real-time payment features in integrated platforms, these tools deliver the seamless digital experience SMBs and their customers increasingly expect.

2. Deepen member relationships and loyalty

Core to the mission of credit unions is helping community economies grow. Helping a business owner solve their cash flow challenge is a great way to live out that mission. It earns a level of trust that strengthens loyalty, reduces churn, and naturally opens doors for cross-selling other valuable services like business loans, lines of credit, and merchant services. The credit union becomes the first call the SMB makes, and the relationship deepens the credit union’s ties to the community.

3. Deploy modern experiences and products

The fintech boom has raised the bar for digital experiences. SMBs now expect intuitive and integrated financial tools for themselves and their end customers. Traditionally, many of these tools have been provided by small fintechs. But the number of different apps quickly add up and become difficult for busy SMBs to manage.

Modernizing the member experience also means simplifying how SMBs move money. Features like one-time and recurring payments, account entitlements, and secure automation reduce friction and help SMBs manage cash flow with confidence. Together, these tools create a unified, tech-forward experience that credit unions can deliver without forcing members to juggle multiple providers.

Small businesses prefer working with fewer providers and would rather trust a dependable partner with their cash flow tools than a host of unproven newcomers. To win this business, credit unions must offer a modern digital experience and products and support its implementation where necessary.

4. Create new engagement and revenue opportunities

Advanced business services create new pathways for both member engagement and revenue generation. Cash flow management can be positioned as a premium value-added service, creating opportunities for subscription revenue. Furthermore, integrated payment processing can drive card interchange income, while better financial visibility can lead to increased deposit growth and interest from revolver balances.