B2B FinTechs Target SMBs With Expanded Offerings

For years, B2B FinTechs have built their empires around serving enterprise clients spanning global banks, Fortune 500s and institutional investors. But today, a new customer segment is commanding their attention with growing urgency: small- to medium-sized businesses (SMBs).

The appeal? SMBs need the same sophistication in cash management, credit and payroll as larger enterprises, but lack the internal finance teams or legacy tech to support it.

It’s a strategic pivot that is quickly reshaping the future of FinTech. Take, for example, the Monday (April 7) announcement that Pennylane raised around $82 million to grow its accounting platform for SMBs.

From embedded finance to real-time cash flow tools, B2B FinTech companies are rolling out solutions tailored specifically to SMBs’ unique challenges. In doing so, they are not just unlocking a massive and underpenetrated market, but they are also catalyzing a new wave of innovation in financial infrastructure.

SMBs are the beating heart of the economy, but they’ve traditionally been treated like an afterthought when it comes to financial services and other innovative product offerings. But recent advances in open banking, AI-driven underwriting and application programming interface (API)-first architectures have made it both feasible and profitable for FinTechs to target SMBs at scale.

Read also: What Pinball Tells Us About Spending in the Post-Tariff World

Innovation is Making Operational Complexity Disappear for SMBs

Financial institutions have traditionally struggled to serve SMBs for several reasons. Unlike consumers, SMBs have highly varied business models, cash flow patterns and credit profiles. Unlike large enterprises, they lack dedicated finance teams or the volume to justify custom solutions. This “messy middle” left them in a no-man’s land — too complex for retail, too small for corporate.

As the macro backdrop shifts, this no-man’s land could become deadly for SMBs. The most recent core finding from the latest PYMNTS Intelligence report reveals a stark reality : one in five SMBs without access to financing fear they may not survive ongoing tariff-related cost increases. These businesses, often viewed as the backbone of the U.S. economy, are being squeezed between the rising cost of goods and limited financial buffers, highlighting systemic weaknesses in capital accessibility across the sector.

According to the data, only 44% of SMBs currently have access to any form of external financing — be it bank loans, lines of credit or alternative lending. The remaining 56% rely primarily on operational cash flow or personal capital to fund day-to-day operations. This divide is particularly troubling when considered alongside macroeconomic trends.

Separate March data from the PYMNTS Intelligence SMB Growth Report reveals that nearly one in three rural SMBs (30%) that report declining revenue.

Enter artificial intelligence (AI) and machine learning, which are helping to address one of the thorniest challenges in SMB finance: risk assessment. Traditional credit models often fail to capture the nuance of SMB cash flows, seasonality or industry-specific patterns. AI models, trained on large and diverse datasets, can identify signals that human analysts might miss — such as social proof from customer reviews, real-time inventory turnover or invoice payment behavior.

These solutions are helping SMBs find the working capital solutions they need. For example, PayPal reported last month that it had passed $30 billion in global loan originations for small businesses since launching its first merchant lending solution in 2013. Over that time, the company has extended more than 1.4 million loans to more than 420,000 business accounts globally.

Thirty-seven percent of SMBs are highly interested in switching to providers that offer embedded lending options, according to the PYMNTS Intelligence report commissioned by Visa , “ Embedded Lending: From the Lender’s Perspective .”

See also: Why 1 in 5 Smaller Businesses Without Financing Fear They May Not Survive Tariffs

Cash Flow, Payroll and Beyond

Today’s SMBs expect financial products to be as seamless as the apps they use in their personal lives. The marketplace is responding with API-first platforms that help make this possible by enabling FinTechs to build modular, embeddable solutions that can integrate directly into the platforms SMBs already use — like eCommerce storefronts, accounting software or point-of-sale systems.

At the end of last month, HoneyBook , a business platform for service-based entrepreneurs, introduced AI-powered business management tools; while Chaser launched an integration with Odoo, saying it provides automated AR (accounts receivable) tools like automated follow-ups and credit control tools that help businesses automate repetitive tasks and gain actionable insights.

Elsewhere, Priority Technology Holdings launched a new tool to help small businesses with their individual coverage health reimbursement arrangement (ICHRA) plan payments and administration workflows. ICHRAs are employer-funded health benefits that let employers reimburse their workers tax-free for individual health insurance premiums and qualified medical expenses.