Many Small Business Owners Lack Financial Safety Net

Small business owners across the U.S. shared confidence and ambitious growth plans in recent surveys, but beneath that optimism lies a more fragile financial reality. According to the second “Financial Preparedness Survey: Small Business Owners Report” from TD Bank U.S. Holding Co., 94% of surveyed small business owners said they felt financially prepared for the next 12 to 18 months.

More than one-third (34%) said a business should ideally have more than six months’ emergency savings to be considered financially prepared, but only 24% said they had that amount of money reserved, showing how financial aspirations fell short for many.

“While financial preparedness is top of mind for small business owners, it is not reflective of their true financial state,” said Andy Bregenzer, TD Bank U.S.’s head of regional and small business banking and co-head of commercial banking, in a statement. “Our advice to small business owners is build financial resilience. It is not just about business survival but about positioning their businesses to grow with confidence, no matter what the future holds.”

Confidence Meets Complexity

Small businesses are shaped not only by inflation and interest rates, but also by rapid digital transformation, workforce shifts and generational change. With 2.3 million small businesses owned by aging Baby Boomers preparing to retire, many owners are navigating succession decisions while also trying to adopt new digital tools and artificial intelligence.

Forty percent of surveyed owners said finding advice from a trusted financial partner has been difficult. At the same time, demand for guidance was rising: 95% said they would likely use artificial-intelligence-driven resources offered through their bank in the next 12 to 18 months, and 53% said they were considering hiring a financial adviser in the same timeframe, up from 27% in 2025.

“Small business owners do not just want access to capital. They want clarity on how they can use it to make the most of growth opportunities,” said Chris Ward, TD Bank U.S.’s head of small business banking, in a statement.

On behalf of TD, Wakefield Research surveyed 1,000 U.S. small business owners online and through email from March 13 through 26.

Generational Shift, Risk

The push toward modernization highlighted by TD is becoming critical amid an ongoing generational transition. The “2026 Zelle Small Business Pulse Report” showed a widening gap between retiring owners and younger buyers. Nearly half (49%) of surveyed small business owners older than 50 planned to exit within the next decade, but 60% lacked a succession plan.

The researchers at Zelle, owned and operated by Early Warning Services LLC, said acquisitions could provide solutions.

“There is a massive opportunity right now for the next generation of entrepreneurs to skip starting from scratch and instead buy and modernize existing businesses,” said Denise Leonhard, Zelle’s general manager, in a statement.

The Zelle report underscored how far expectations have shifted for younger entrepreneurs. A strong majority of prospective buyers (88%) said receiving payments quickly was critical to reducing first-year risk, while 84% were more attracted to businesses that already operated digitally. In addition, 67% said outdated payment options could derail a deal entirely.

At the same time, many existing businesses were not prepared to meet those expectations. Only 29% of responding business owners considered their operations modernized. As a result, 41% said they would shut down if they could not find a buyer.

The Zelle report drew on two national surveys conducted in March that included 500 small business owners age 50 and older and 250 Gen Z and Millennial master of business administration students or graduates younger than 45.