The U.S. is home to 36 million small businesses—99.9% of all businesses—and roughly 11 million of their owners are already credit union members, according to Velera’s CU Growth Outlook 2026. The opportunity, then, isn’t simply to win new small business members. It’s to turn existing relationships into deeper, more valuable ones.
In a PaymentsJournal Podcast, Velera’s Vice President of Marketing Carrie Stapp, and Vice President of Product Management Sheba Carnes, as well as Brian Riley, Co-Head of Payments at Javelin Strategy & Research, discussed how credit unions can capitalize on this opportunity. That means finding the sweet spot between big banks and single-service fintechs—combining the personal service and community connection that small businesses value with the tools and capabilities they expect.
Developments in the Market
The growth of the small business market comes at a moment when credit unions are facing slower consumer loan growth, greater competition for deposits and continued pressure on margins. Serving small businesses can help address all three challenges: They need lending, they need to maintain operating deposits and they need to use a variety of payment services that create additional revenue opportunities.
And this market is growing in ways that play to the strengths of credit unions. AI technology has lowered the barriers for entry to small businesses, allowing entrepreneurs to launch faster and operate more efficiently with smaller teams. With fewer people on staff, these businesses are more likely to turn to outside experts—including their credit union—for help with areas such as payments and data analysis. As those businesses succeed, credit unions should position themselves to grow alongside them.
“Many business owners have been forced to look elsewhere as their business grows and their financial needs become more sophisticated,” said Carnes. “We see the industry having a tremendous opportunity to evolve and to become the financial partner that the businesses don’t outgrow.”
This is especially important because small businesses rarely rely on just one financial institution. Velera’s study found that 86% of SMBs use multiple financial institutions, with the average business using three. One reason, perhaps surprisingly, is that small business accounts tend to be sticky: Once a business begins working with a financial institution, there is little incentive to switch.
As a result, credit unions are not necessarily losing these SMB relationships to other institutions; they are sharing them. The challenge is getting a larger share of the relationship, particularly as a business’s needs become more sophisticated.
That’s where credit unions can begin to fall behind. As small businesses grow, they increasingly look for reporting and analytics capabilities, more advanced business rewards programs and payment solutions that allow them to seamlessly move money in and out of their businesses while tracking finances and inventory. If a credit union can’t provide those capabilities, another financial institution or fintech can fill the gap.
Personal Service and Beyond
This is where one of the credit union sector’s traditional strengths becomes especially valuable.
Credit unions have always excelled at service, and small businesses especially value having a personal relationship with someone they can call when they need help. That relationship can give credit unions a meaningful foothold with business owners, but it can’t be the entire proposition.
“Winning on trust, service and relationship banking is something that the larger financial institutions and the fintechs are going to have a hard time replicating,” said Stapp. “That allows us to be the differentiator, especially when those small business owners are looking for the consultation and the location of their bankers to be there to help them set everything up and to grow and adjust with their needs.”
Personal service alone is no longer enough. Credit unions need to make themselves indispensable to small businesses, both personally and technologically.
“Business owners want frictionless onboarding, an intuitive mobile experience and real-time visibility into their finances,” said Carnes. “The expectation now isn’t really choosing between the high-touch service and the great technology. Businesses expect both.”
Payments are a natural place to deepen those relationships. They sit at the center of virtually every business operation, from paying suppliers and accepting customer payments to managing expenses. Businesses need help integrating these processes with their other software, and those payment relationships also give credit unions valuable insight into how the business operates.
In other words, payments can do more than generate revenue. They can help credit unions better understand their business members and create additional opportunities to support them as they grow.
Finding the Competitive Sweet Spot
Credit unions are competing on two fronts—big banks on one side and fintechs on the other. Each brings a different set of strengths to the small business market.
Fintechs like Stripe offer turnkey payment products that can be easy for businesses to adopt. But their offerings tend to be fairly focused. Small businesses, particularly as they grow, need a more holistic approach to managing their finances.
Large national banks can provide a broad range of products and services, but they can lack the personal connection that smaller businesses value. Credit unions, by contrast, are embedded in the same communities as their small business members.
“The big bank strategy is to go in with very aggressive credit lines, because they lack what credit unions have, which is the personal relationship with the customer,” said Riley. “You’re working in the same area. Their business is not out of a New York based business or a large call center somewhere else. And that’s a homecourt advantage that’s really important.”
“You own the local market as a credit union in a lot of ways,” he said. “You’re not dealing with some large bank where you’re just an account number—you are dealing with the personalization that goes with going through a credit union.”
Key Takeaways
The foundation is already there. Velera’s research shows that credit unions are starting from a position of strength when it comes to serving small businesses.
“Many of the attributes that they reported directly to us align with all of our strengths,” Stapp said. “The community focus, the personalized service, access to a dedicated banker, all of that consultative approach—in addition to being a low-fee offering, which is really important to these small businesses when they’re getting their feet under them and getting them on the ground.”
For credit unions, that means looking beyond the traditional business account and considering where existing relationships can go next. Members who own businesses could be natural candidates for small business relationships, while non-members are prime candidates for developing a full-service relationship. Once these small businesses are under the credit union’s umbrella, they present a wide variety of cross-sell opportunities.
And for businesses already on the credit union’s business side, the relationship can evolve as the organization does. Growth may bring increasingly sophisticated needs, including treasury services and back-office management.
The challenge is making sure the credit union is ready at every stage, not just to win the small business relationship, but to keep expanding it as the business grows.
“Make sure that you’re not allowing your business members and prospects in your general area to outgrow the products and solutions that you have to offer,” said Stapp. “You need to be continually evolving with them. Not just ‘Am I serving their needs today?,’ but ‘Am I equipped to solve where my small businesses are going?’ Utilize that personalized service and dedicated banker model to really understand where those small businesses are headed, so that you can be a step ahead.”