Imagine a small business poised to expand–for example, a coffee shop expanding to a second location. The entrepreneur who runs this coffee shop has got a lot on her to-do list. She’s got to scout locations, do market research to figure out the demand for her product in a new neighborhood, hire staff, advertise, and order more inventory. But there’s one thing she needs before she can do any of that: credit.


Any small business that’s growing needs credit to fuel that growth–it’s essential. Data shows that small businesses that are growing are the heaviest users of credit products. According to Barlow Research, almost 60% of businesses in a growth stage have used at least one credit product. That’s compared to about 50% of mature businesses, 40% of declining businesses, and about 15% of businesses in a development stage.

For banks, that means that small businesses that are growing are the customers who need them the most. And with a strengthening economy, the number of businesses entering an active growth stage will continue to increase. Barlow Research further indicates about a third of small businesses are in a growth phase now. These customers are already relying on their banks to provide the necessary capital fueling their growth. Securing their loyalty now could mean locking in lifelong customers who will — if they meet their current growth targets — be looking for bigger and more profitable credit products in the future.

Growth-phase businesses do tend to be loyal customers. They consider their banks as active partners. According to Barlow, more than 40% of growing businesses are loyal to their primary banks, compared to about a third of mature and developing (i.e. smaller-scale) businesses.

But just because growing businesses are loyal customers doesn’t mean they offer no opportunities–or risks–for banks. Almost 60% of growing businesses use at least one credit product, but only about 45% of them use a credit product from their primary bank. That means some growing businesses are looking elsewhere to fulfill that crucial need for credit. And a customer who’s looking elsewhere is a customer who may eventually take all of their business elsewhere.

So how can you make sure that these growing businesses stick with your bank and continue to rely on your credit products? There are a number of ways to build lasting customer loyalty. Customer service, of course, is key. Small businesses are also highly sensitive to fees, and they’re increasingly interested in having more product options to choose from. Together, that all means that technology plays a surprisingly big role in bank customer satisfaction. Better tech can reduce operational costs, increase the number of product options you’re able to offer, and help you streamline the borrowing experience, making the lending process faster and more convenient for the customers who need those enhancements most.


Small business owners are overworked, overstretched, and overstressed. Anything you can do to make their lives easier–especially at a moment when they’re taking on even more responsibilities with an expansion plan–will increase their loyalty and decrease the chances that they’ll start looking elsewhere for the credit they need. Learn more about how fintech has evolved to make your customers’ lives easier in this infographic.

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