Are you someone who owns a startup, runs a small business, or enjoys freelancing hours? If yes, you’d better not overlook the fundamentals of financial literacy. Booksmerge recent surveys have come up with some shocking results, stating that around 50% of small businesses face fiscal challenges due to insufficient financial literacy. Unfortunately, it’s leading to bad decision-making, poor strategies, and plans to address fiscal challenges.
Among all the small businesses, startups, and freelancers facing financial problems due to low literacy levels, around 15 % of them failed to successfully recover from the setbacks. From failing to bouncing back and stabilizing the financial system to returning to a healthy financial status, the affected businesses are facing significant stagnation or even business failures.
You must be wondering about how Financial Literacy is beneficial for small business owners and freelancers. Beyond just a term, it’s the master key to unlock a stable plus healthy financial management system along with a complete peace of mind. Having a strong command of Financial Literacy helps professionals better brush up on their financial skills, including investing, budgeting, cash-flow management, and pre-planning for possible crises.
We understand that to run a successful business and make it as an established enterprise, it’s crucial to become a skilled captain, having the essential financial knowledge and staying updated with all the current rules & regulations.
In this post, we have covered the top 25 must-know stats related to financial literacy and its impact on business owners like you. Beyond any doubts, the wisdom of the financial industry empowers you to ensure a sturdy financial system within your company. Now, with no further delays, let’s quickly go through the stats.
A survey of around three-quarters of owners stated they’re expecting a significant rise in their business revenue in the coming year. Well, it’s a very optimistic approach despite the financial strain from rising expenses. Moreover, Bank of America’s analysis found a plan to expand its operations by 60%.
The 2024/2025 SBCS demonstrates that small businesses often take on debt to manage working capital. Hence, credit terms and availability remain consequential obstacles to achieving growth and maintaining liquidity.
This across-the-board gap in financial literacy is not restricted to personal finance; it amounts to a critical “back-of-house problem” that denies small-business owners and freelancers alike the business decisions and growth potential.
While 74% anticipate increased revenue, businesses owners highlight that their belief and therefore their predictions hinges directly on macro policy moves, precisely quoting the need for lower rates or stable taxes.
Federal Reserve regional outlines (SBCS insights) flag that a noteworthy share of small employers reported earnings decreases in the earlier 12 months, even as some plan acquisition.
The analysis of FreshBooks’ tax trends shows that around 26% of owners are confidently handling taxes, while many still struggle with receipts, deductions, and complex rules.
According to Truist’s annual small-business survey, most small businesses have experienced at least one cash shortfall in the last 12 months, highlighting the importance of budgeting and cash management.
The latest surveys and bank research show that the majority of small business owners handle accounting tasks in-house (either by the owner or staff), which saves costs but increases the stakes for basic financial skills and internal controls.
Industry and Fed reports assure this disconnect: many owners self-identify as “financially literate” yet still face challenges with core operational issues, including effective budgeting, pricing strategies, and managing cash flow.
Small and midsize businesses are responsible for a substantial share of private-sector employment and revenue. As a result, the financial health of SMBs has macro-level implications for extensive labor market stability and overall economic growth outcomes.
SBCS regional analysis found discrepancies: a few minority- and women-owned businesses face more destructive credit outcomes and report needing more custom-made financial resources.
Banking and industry reports indicate a growing interest in Automation – precisely for payments, invoicing, and cash forecasting. Owners have decided to plan strategically to reduce manual errors and improve real-time visibility in 2026.
Recent surveys has highlighted the dynamic market, indicating that owners are planning for growth along with thorough preparation and strong credit readiness to continue running with massive success.
Data from Pew and the Fed show a concerning trend: as more Americans anticipate their finances worsening, this negative household outlook will immediately translate into weaker revenue prospects for small firms.
Major surveys from Reuters, Bank of America, and Forbes found that businesses that invest in maintaining core owner skills precisely budgeting, tax planning, and credit schemes will ensure a competitive edge and be far more effective in realizing their probable revenue gains.
A large number of small business owners have found that they are improving and running with updated knowledge about financial security. Rest, facing challenges, and dealing with an unexpected financial crisis.
A portion of owners in the small business industry will be expanding personal wealth by starting new ventures or side hustle. For enterprise owners, starting or developing a small business is way better than buying a property to build wealth.
About three-quarters (76%) of small business owners report being comfortable with their current cash flow and maintaining a regular, positive perspective. This cash flow comfort is a key indicator of short-term financial stability.
A significant number of small businesses are reporting declining profits, with some surveys showing that 30% of owners recently reported a decrease in profitability. The market can clearly see ongoing pressure from rising operating costs and inflation.
Around 40% of small business owners carry significant debt, with outstanding balances surpassing almost $100,000. This high leverage remains above pre-pandemic levels for many firms.
A large majority of small business owners (over 75%) express concern about their ability to access capital and affordable credit. Increasing interest rates and tighter underwriting measures at banks often drive this anxiety.
The majority of small businesses highly depend on personal financial resources to begin their operations. Around 78% of small businesses start up using personal savings rather than external investors or business credit.
Most small businesses rely on credit cards for financing; over 50% of owners who use credit cards report using 50% or more of their available credit limit. This high utilization rate can pull credit scores and raise interest costs.
Despite financial headwinds, long-term optimism remains stable, with nearly half of small businesses (47%) anticipating an increase in Investment in their businesses over the next year. This planned Investment usually targets technology or equipment promotions.
Contrasts in lending continue, with Black, Asian, and Hispanic-owned businesses significantly less likely to accept the full amount of financing they apply for than their white-owned counterparts. They are also less likely to seek funding from large banks.
