The nation's 30 million small businesses account for almost half of U.S. economic activity. They create two-thirds of net new jobs, and they're big drivers of business diversity, innovation, and overall competitiveness.

Collectively, small businesses are the foundation of healthy, vibrant communities across the country.

Most small business owners, however, are increasingly worried about the future. The combination of stubbornly high inflation, soaring market interest rates, challenges with hiring and retaining employees, and the looming possibility of recession has taken its toll.

The National Federation of Independent Business reports its Small Business Optimism Index has been on a broad declining trend. Index readings below the 49-year average of 98 have been obvious for nearly two years.

A recent refresh of the 2023 America's Credit Unions National Voter Poll confirms these broad concerns and uncovers significant challenges and dislocations.

For example, survey results reveal that only 45% of business-owner households say their income is keeping up with the cost of essentials like gas, groceries, and housing.

Behavioral signs of financial challenges in business-owner households also are easy to see. When compared to all households, business-owner households are much more likely to use alternative financial services providers to meet financial obligations. These include rent-to-own companies, payday loan providers, pawnshops, and auto title firms.

They’re also more likely to self-identify as financially unhealthy.

The challenges are obvious. However, survey results unambiguously reveal that business-owner households who are members view their credit unions much more favorably than their nonmember counterparts view the for-profit banks and other providers they use. This is true across nearly all performance metrics we evaluate.

The differences we find appear to stem from credit unions’ more consultative approach, more business-friendly pricing, thoughtful products and services, and an overall sense of trust that financial cooperatives foster in business-owner households.

For example, business-owner household respondents who are credit union members are 1.4 times more likely than nonmember business-owner households to say they’ve received personalized financial education/counseling at their financial institution. Responses show that credit union members have acted based on the advice they received at their credit union, and have established a financial buffer to shield them during tough times.

Business-owner households that don’t use credit unions are twice as likely as their counterparts who are members to say they haven’t established a financial buffer of at least $500 to meet unexpected expenses.

Not surprisingly, business-owner households who are members are 1.3 times more likely than nonmembers to say they’re very positive their financial institution has improved their financial health.

Polling results detail similar differences across most of the 11 other dimensions related to financial health, including those related to trust, service provision, and community focus.

Next: A promise to members