How banks can support small businesses amid uncertainty

• Key insight: Banks are critical to helping small business owners through periods of uncertainty, a U.S. Bancorp executive said at American Banker's 2025 Small Business Banking conference.
  
• What's at stake: Supporting small businesses is a key mandate for many banks as they seek to build relationships with business owners and grow their market share.
  
• Expert quote: "The critical thing is to have those discussions," the executive said.

HOLLYWOOD, Fla. — Small businesses are facing an onslaught of uncertainty in 2025, creating an opportunity for banks to increase their support for an essential component of the U.S. economy, an executive from U.S. Bancorp said Monday at American Banker's Small Business Banking conference.

Tariffs are a major driver of uncertainty this year, and questions about the state of the economy, inflation and geopolitical unease are causing headaches for small businesses. Banks have a chance to be proactive in advising small businesses on how to handle the challenges, said Sekou Kaalund, the head of branch and small business banking at U.S. Bancorp since 2022.

"The one thing we can't do is really influence or impact" areas such as tariffs, said Kaalund, a former JPMorganChase executive who participated in a fireside chat during the two-day event in Hollywood, Florida. "But what we can do is ensure we're having those conversations with small business owners … The critical thing is to have those discussions."

There are more than 36 million small businesses across the country, according to the U.S. Small Business Administration Office of Advocacy's 2025 Small Business Profile. They dominate the nation's business corridor, making up 99.9% of all U.S. businesses, and they employ more than 62 million people, representing nearly 46% of the total U.S. population, the profile shows.

Banks have been key partners in providing capital, operating accounts and advice to small businesses, which are usually defined as companies employing fewer than 500 workers.

Minneapolis-based U.S. Bank, which operates in 26 states, has more than 1.4 million small business customers. U.S. Bancorp, the $695 billion-asset parent company of U.S. Bank, has introduced several products this year for small businesses, including an app to manage business credit card spending, a no-cost online education hub for small business owners and new cash flow management and payroll platforms, both of which were developed with the help of fintechs.

On Monday, U.S. Bank released an updated treasury management platform for businesses of all sizes. The enhanced SinglePoint offers a way to manage payables, receivables, liquidity, fraud mitigation, international banking and foreign exchange, all through one point of entry.

One area where banks may find more opportunities to step up is on the capital front. Small businesses that don't qualify for traditional bank loans sometimes tap into the nation's vast network of community development financial institutions. But the Trump administration fired the entire staff of the Community Development Financial Institutions Fund earlier this month.

Last week, more than 100 Republicans signed a letter in support of the CDFI Fund, arguing that CDFIs play a crucial role in supporting economic development in rural, tribal and other underserved communities. The ongoing government shutdown is only adding to the uncertainty of the fund's future.

"The big thing is, you don't want to wait for that client to call you anxious," said Kaalund, who joined U.S. Bank's 16-person management committee in January.

Banks should aim to small businesses by providing products and services that are considered "value-adds" and therefore enhance a firm's relationship to that bank, Kaalund said.

"It's not just providing one service, a card here and a checking account there," he said.