What The Banking Crisis Means For Small Business

What The Banking Crisis Means For Small Business
Categorized as ASCEND Business Advisory, Business Strategy Tagged

As a business and finance professional I know that small business owners are the backbone of the economy. However, the banking crisis of 2023 has created questions and even some fear for many. In this blog, we’ll explore what the banking crisis of 2023 means for small business owners in Southern California and across the country.

The Banking Crisis Of 2023 – What Is It?

The recent news of the closure of Silicon Valley Bank has caused some panic, making us wonder if we’re in a new banking crisis.. This may feel like a crisis for SVB and a few other banks, but it has not reached the level of a true crisis, a la 2008-2009. In this case, the FDIC stepped in and protected banking customers. Additionally, larger banks have stepped in and backed smaller banks. While we also saw Signature Bank fold, this has yet to turn into a full crisis. That said, many small businesses still worry about inflation, their markets, supply chain, etc.

How Did The Banking Crisis Affect Small Business Owners In Southern California?

The banking crisis of 2023 had an emotional impact on small business owners in Southern California. Here are some of the ways the banking crisis affected small business owners:

  • Difficulty in accessing credit: It may become more difficult for small businesses to access credit. Banks may become more cautious in lending money due to increased risk, making it harder for small businesses to obtain the funds they need to operate or expand their businesses.
  • Decline in consumer spending: If we enter an economic recession, it could lead to a reduction in consumer spending. This can hurt small businesses that rely on consumer purchases, as customers may cut back on spending or delay purchases.
  • Increased financial uncertainty: A potential banking crisis can also create economic uncertainty for small businesses. For example, if a small business has a loan with a bank that goes bankrupt or merges with another bank, it could impact their loan terms, interest rates, or other aspects of their financial agreements.

What Can Small Business Owners Do?

While the banking situation of 2023 may create challenges for small business owners, there are steps they can take to mitigate its impact. Here are some suggestions:

  • Build cash reserves: Small business owners should aim to build cash reserves to help them weather any financial storms. This can help them cover expenses in case they face difficulty accessing credit or a decline in consumer spending.
  • Explore alternative funding options: If traditional banks become more cautious in lending money, small business owners can explore other funding options such as crowdfunding, angel investors, or online lenders.
  • Diversify their customer base: Small business owners can reduce their risk by diversifying their customer base. They can expand into new markets or customer segments  to reduce their dependence on any single customer or market.


The banking “crisis” of 2023 can create challenges for small business owners in Southern California and across the country, but with proper planning and preparation, they can overcome these challenges. By building cash reserves, exploring alternative funding options, and diversifying their customer base, small business owners can position themselves for success even during uncertain times. Hang on. These are tumultuous times, but there’s always a bright side.

If you have questions or concerns about your business, schedule a consultation with William to discuss your business. . Visit WR Company.biz or Call 888-297-3321.