Confident but Cautious: TD Survey Finds Small Business Owners Optimistic About the Future, Yet Many Still Lack a Financial Safety Net

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Second Annual TD Survey Finds Small Businesses Are Eager to Level Up to Grow, Modernize Operations, Adopt AI and Strengthen Fraud Defenses

MOUNT LAUREL, N.J.--(BUSINESS WIRE)-- Small business owners across the U.S. are going through the year with confidence and growth ambitions, but many remain financially vulnerable beneath the surface, according to the second annual Financial Preparedness Survey: Small Business Owners’ Report from TD.

The survey finds that, while 94% of small business owners say they feel financially prepared for the next 12 to 18 months, only 24% report having more than six months of emergency savings to cover operating expenses. At the same time, more than one-third of owners (34%) say a business should ideally have more than six months of reserves to be considered financially prepared, underscoring a gap between confidence and cushion.

"Working capital is critical to both short- and long‑term stability for small businesses, giving owners the flexibility they need to adjust and adapt as the landscape changes," said Andy Bregenzer, Head of Regional and Small Business Banking and Co-Head of Commercial Banking, TD Bank U.S. "But our survey data shows that while financial preparedness is top of mind for small business owners, it is not reflective of their true financial state. 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."

Optimism Is Back Even as Risk Stays Front and Center

The majority of small business owners (74%) expect the macroeconomic environment to improve over the next 12-18 months, signaling a directional increase from 2025. Yet optimism is tempered by persistent, day-to-day risks that could impact financial preparedness, including:

• Cybersecurity or fraud incidents (46%)
• High input costs such as materials, utilities and insurance (44%)
• Unexpected declines in sales or revenue (39%)
• Difficulty hiring or retaining workers (37%)

Fraud, in particular, has become a widespread concern. More than half of respondents (54%) say their business experienced fraud or attempted fraud in the past year, and 12% report that it resulted in financial loss.

AI Goes Mainstream for Small Businesses

One of the most significant shifts revealed by the survey is the rapid adoption of artificial intelligence. Nearly seven in 10 small business owners (69%) say they are now using AI to help decrease expenses, a sharp increase from 39% last year.

Rather than replacing workers, most owners see AI as a tool to scale smarter.

• 60% say adopting AI will increase their workforce size, compared to 10% who say it will decrease it.
• Over the past 12 months, small business owners say the biggest benefits of AI/automation for their business have been improving customer service (53%), improving fraud and cybersecurity protection (47%) and helping increase sales leads (42%).
• 95% say they're likely to use the AI guidance and resources available through their bank in the next 12 to 18 months.

Financing Seen as Fuel for “Leveling Up”

Despite lingering risks, small businesses are eyeing growth. The survey finds that 93% of respondents are likely to consider applying for a loan or line of credit in the next 12 to 18 months, up from 82% last year, and 96% say financing would be necessary or potentially necessary to "level up" their business.

When asked what leveling up means, owners most often point to growth and market expansion (54%), stronger operations, systems and processes (47%), and improved financial performance (45%). Loans and lines of credit are expected to support not only growth, but also modernization efforts such as AI adoption, cybersecurity investments and operational upgrades.

The percentage of small business owners planning to obtain a loan or line of credit from their bank increased from 33% to 55%.

“These findings reflect what we are hearing from small business owners every day. They are looking to grow, and they are seeking credit as a way to fund more than just their day-to-day operations, they are looking to invest in modernization, adopt AI, and strengthen fraud defenses,” said Chris Ward, Head of Small Business Banking, TD Bank U.S. “At TD, we’re focused on delivering clear strategies and practical tools to help businesses turn that ambition into long-term resilience.”

The Need for Trusted Guidance

For America’s small business owners, today’s economic environment isn’t just about inflation, interest rates or market volatility; it’s about managing growing complexity. With 2.3 million small businesses nationwide owned by aging Boomers preparing to retire*, many are navigating this moment while also figuring out how to adopt new digital tools and AI.

As complexity rises, owners are looking for more support: Forty percent say that finding advice from a trusted financial partner has been a challenge, even as an overwhelming majority (95%) say they would likely use AI-driven guidance or resources offered through their bank in the next 12-18 months. Additionally, the percentage of owners who are considering hiring a financial advisor to improve their business outlook in the next 12-18 months rose to 53%, up from 27% in 2025.

"Today’s small business owners don’t just want access to capital, they want clarity on how they can use it to make most of growth opportunities," Ward said. "We as a bank have an opportunity to play a bigger role by simplifying complexity and helping owners make confident, informed decisions. This is what we are focused on."

Together, the findings paint a picture of a small business sector that is disciplined, ambitious and increasingly tech-enabled, but still looking for trusted guidance as it navigates risk, growth and uncertainty. As owners embrace new technologies and focus on building resilience and seizing opportunities for expansion, they are seeking resources, support and strategic decision-making from their bankers.

Survey Methodology

This survey was conducted by Wakefield Research among 1,000 small business owners (100 employees or fewer, $100,000+ in annual revenue), including 250 respondents nationwide and 125 respondents each in New York City, Boston, Washington, D.C., South Florida, the greater Philadelphia area, and Charlotte. The survey was fielded March 13–26, 2026 via email invitation and online questionnaire.

* https://project-equity.org/press-releases/2-3-million-small-businesses-nationwide-owned-by-aging-boomers-preparing-to-retire-puts-1-in-6-employees-jobs-at-risk-based-on-a-project-equity-study/

About TD Bank U.S.

TD Bank US Holding Company and its subsidiaries, including TD Bank, N.A., are collectively known as TD Bank U.S. As the U.S. banking business of The Toronto-Dominion Bank (TSX and NYSE: TD), a leading North American financial services firm, TD Bank U.S. serves more than 10 million clients and has a network of approximately 1,050 locations throughout the Northeast, Mid-Atlantic, Carolinas and Florida. We support our clients and communities with a full range of retail, small business, and commercial banking products and services. We also offer customized private banking and wealth management services, a comprehensive suite of credit card products for consumers and businesses, and automotive vehicle financing and dealer commercial services. TD Bank U.S. is one of the largest banks in the U.S. by assets and is headquartered in Mount Laurel, N.J. To learn more, visit www.td.com/us.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260428591405/en/

Media:
Oindrila Hazra
TD Bank
Corporate Communications Manager – Commercial and Small Business Banking
Oindrila.Hazra@td.com

Source: TD Bank