US small businesses turn to personal savings for cash

Flute has published research showing that 79% of US small business owners put personal money into their businesses in the past year. It also found that 57% had USD $1,000 or more tied up in pending deposits, holds or unpaid invoices at any given time.

The findings are based on a survey of 209 US small business owners and point to cash flow strain as owners wait for customer payments and bank settlements. More than half, or 52%, said they needed extra cash in the past year, often to buy inventory before it could be sold.

That pressure appears to be pushing owners towards their own finances. The research found that 48% used business credit cards to cover shortfalls, 47% turned to bank loans and 42% used personal savings.

Access to outside funding was uneven. Only 37% of owners applied for financing, and 28% of those applicants either received less than they requested or were denied.

Smaller firms faced the biggest obstacles. Among businesses with less than USD $250,000 in revenue that needed cash, 27% could not access funding, compared with none of the larger businesses surveyed.

Settlement delays

The report also highlighted delays in receiving money already earned. It found that 58% of owners wait two or more days for bank settlement, while 73% said faster access to their funds would meaningfully change how they run their business.

For some businesses, those delays involve substantial sums. Among businesses with at least USD $250,000 in revenue, 73% had USD $1,000 or more waiting to clear, compared with 42% of smaller businesses.

Slow payments were also linked to changes in day-to-day operations. Nearly two-thirds, or 63%, said payment delays forced them to change how they operated in the past year.

Inventory was one of the main areas affected. The survey found that 35% delayed inventory purchases, while 28% used personal savings or credit to bridge the gap while payments were pending.

Derek Dean, Chief Executive Officer of Flute, said the findings show how healthy sales do not always translate into immediate cash on hand.

"A business can have a good week of sales and still need the owner's savings to pay for the next inventory order. If the money hasn't landed by the time their bills come due, owners cover the wait out of their own pockets. Over time, that puts pressure on their household finances and on the business. Payment providers already know what a business is bringing in every day. Flute uses that sales history to make funding easier to access, alongside faster payouts that put the money they've already earned to work sooner," said Dean.

Funding gap

The survey pointed to a disconnect between payment processors and business funding. Among owners who needed cash, just 4% used their payment processor as a funding source, making it the least-used option tracked in the research.

Interest, however, was higher than current usage suggests. Some 24% said they would consider funding from their payment processor, while only 37% said they had ever received a funding offer from one.

There was also a divide by size in who received those offers. Payment processors had made funding offers to 51% of businesses with at least USD $250,000 in revenue, compared with 24% of smaller businesses.

Flute said its working capital and instant payout products were launched through a partnership with Jaris. Working capital applications are handled through its dashboard, with decisions based on transaction history already recorded on the platform.

Its instant payout product lets merchants access a portion of the current day's sales, including at weekends and on holidays, before standard settlement is completed.

According to the methodology, the survey was conducted from August to September 2026, and all respondents passed an attention check.