How Small Banks Help American SMEs Grow

WASHINGTON, D.C., Sept. 29, 2025 — The growth story of small banks in the United States has been full of innovations, especially in their association with small businesses. Not just banking, but the entire financial services sector has, from time to time, been launching products tailor-made for Small and Medium-sized Enterprises, or SMEs.

Industry experts believe that offering credit facilities and sector-specific digital banking solutions has led to intense competition among small banks or regional financial institutions.

The small business-oriented approach of several banks has also influenced segments such as hospitality, telecom, retail, and other sectors to keep in mind the needs of small manufacturing or production units.

Although the list of small banks which are SME-friendly in the US is quite long, an overview reveals that some of the best small banks and localized financial institutions in the US for supporting business accounts include Live Oak Bank, Bluevine, Relay, Axos Bank, NBKC Bank, and Mercury.

As per an industry survey, there are over 30 million SMBs in the US, making up over 99 per cent of all US businesses across a broad range of industries, geographies, and owner demographics. SMBs are an evolving segment, but current banking offerings and service levels are often below expectations. For incumbents, challenger banks, and non-banks, there are key opportunities to better serve existing and new customers, deepen relationships, and cross-sell products.

Small, Community Banks Supporting SMEs

Grasshopper Bank: This bank is a great choice for startups seeking a free online business checking account, as it pays interest and cash back on debit card purchases, as well as offering financing options, including SBA loans.

Grasshopper Bank’s free business checking account pays interest (up to 1.55 per cent APY) and cash back on debit card purchases, and includes built-in invoicing and bookkeeping tools. Grasshopper business checking customers also have the option to open a money market account, which pays 3.3 per cent APY on balances above $25,000.

Axos Bank: This bank offers a free online business checking account with unlimited ATM fee refunds in the US. It’s also offering a great bonus presently: $400 for new customers who meet certain activity requirements.

The Axos Business Premium Savings Account provides FDIC insurance on up to $250 million in customer funds by utilizing an Insured Cash Sweep network. That account also currently has a $375 sign-up bonus (terms apply) and a near-top-of-the-line APY at 3.8 per cent.

U.S. Century Bank: Established in 2002, U.S. Century Bank is one of the largest community banks headquartered in Miami, and one of the largest community banks in the state of Florida.

It is a wholly owned subsidiary of USCB Financial Holdings, Inc., and rated 5-Stars by BauerFinancial, the leading independent bank rating firm.

U.S. Century Bank offers customers a wide range of financial products and services, and supports numerous community organizations, including the Greater Miami Chamber of Commerce, the South Florida Hispanic Chamber of Commerce, and ChamberSouth. U.S. Century Bank provides financial solutions to help the business owner, entrepreneur, and professional explore new ideas and fulfil their goals.

It offers services such as business checking, business analysis, business interest bearing, business debit cards, merchant services, and business credit cards.

NBKC Bank: The NBKC Bank is popular for full-service banking. The “Everything Account” at NBKC Bank is an all-in-one account that earns interest and offers ATM access with almost no fees. It also offers attractive MMAs, CDs, and loans.

Fintechs that Have Excelled: Bluevine is a technology company, not a bank, but customer funds are held on deposit with Coastal Community Bank and protected by FDIC insurance. Its business checking account offers a competitive APY, and once you’re a customer, Bluevine may offer perks like lower rates on its line of credit.

Bluevine's free, high-yield business checking account earns 1.3 per cent on balances up to and including $250,000, but terms apply, requiring a business to meet certain activity requirements to qualify, and includes up to $3 million in FDIC insurance coverage via Coastal Community Bank and partner banks in the IntraFi network. Users can upgrade to paid subscription plans for lower fees on certain services.

U.S. Bank Avvance, a real-time, point-of-sale lending solution, has been selected by Pure Finance Group to support the home improvement lender’s next growth effort.

The integration of Avvance enabled Pure Finance’s efforts to expand into the HVAC segment and is the latest fintech platform to leverage.

Notably, U.S. Bank has introduced a new online platform, Business Resources Central, to offer free financial education and business tools designed to help small business owners manage and grow their companies.

Small and Mid-Cap Banks That Made a Mark in SME Banking

SouthState has been named among the top three banks in the US for Small Business & Middle Market Banking; it leads the U.S. in Best Bank Awards for Small Business Banking, earning 23 total awards from Crisil Coalition Greenwich. In addition, SouthState has earned the most Best Bank Awards (tied) in the U.S. for Small Business Banking.

A huge support to small businesses in the form of funding via loans has been coming from a tiny branchless bank in Wilmington, North Carolina, just seven miles from Michael Jordan's boyhood home.

Live Oak, Mission Valley Bank’s Success Formula: Founded in 2008, Live Oak Bancshares has 1,053 employees, $14 billion in assets, and a $1.5 billion market capitalization. Since 2017, it has issued $15.4 billion in government-backed 7(a) loans, more than any other bank in the country, including the aforementioned Wall Street heavyweights. The 7(a) program is the Small Business Administration’s flagship offering, designed to help small businesses that might not qualify for conventional credit. Live Oak’s average loan is just $1 million, chump change for bigger, brand-name competitors, but the lender does around $2 billion a year in SBA loans, plus another $3 billion in conventional small business loans.

Notably, while the small and micro business (SMB) market is growing, it’s a largely underserved segment that’s lost between retail and commercial bank offerings.

Mission Valley Bank, a CDFI based in Sun Valley, Calif., was founded by people who are dedicated to working in and serving their community. Founder, President, and CEO Tamara Gurney has made it her pledge to build and nurture relationships that empower both businesses and the communities that the bank serves. Under her leadership, Mission Valley Bank embodies a steadfast dedication to fostering meaningful connections and driving positive change.

The bank prioritizes the financial success of its customers and the well-being of the community above all else. Through initiatives like the “Give Where You Live” program, launched in 2015, it shines a spotlight on local nonprofit organizations and encourages support from community members.

For incumbents, challenger banks, and non-banks, there are key opportunities which include better serving existing and new customers, deepening relationships, and cross-selling products.

Inputs from Saqib malik

Editing by David Ryder