Personal Credit Carries the Weight When SMBs Face Surprises

Business credit for large enterprises operates at arm’s length, guided by formal procurement flows and rigid financial controls.

Everything is mediated through procurement teams, finance departments and policies. But small and medium-sized businesses (SMBs) — the engines of Main Street — have traditionally been underserved by the institutional-scale lenders servicing their larger peers, and credit access can be deeply personal.

SMBs increasingly view personal and business credit as separate but complementary financial tools. According to the report, “SMB Growth Monitor: Small Businesses, Big Credit Needs,” produced by PYMNTS Intelligence with i2c, SMBs typically use business credit cards for planned purchases and personal cards for unexpected expenses.

This “two-track” credit model isn’t just emergent. It’s an unintended workaround that reveals both the creativity and the constraints inherent in the way SMBs manage cash flow.

And it may be creating a pressure point for issuers, who have built most business credit products for stability and predictability, not improvisation.

Business Cards Are Missing Half the Story

On the planned side, business payment cards remain the backbone of predictable cash flow management. They support monthly vendor payments, advertising budgets, software subscriptions, travel, inventory restocking and other expenses with known cadence, amount and purpose.

For these transactions, business owners tend to optimize for rewards, extended payment terms, accounting integrations, and a clean separation of personal and business financial histories.

The report shows that high-revenue SMBs use business cards more heavily, making an average of 25 credit transactions every 20 days, and transaction volume increases by 38% among firms confident in their two-year survival. In stable conditions, business cards remain in the financial infrastructure of SMB operations.

But when a supplier suddenly offers a cash-only discount, a vehicle breaks down or a spike in demand requires overnight inventory, owners frequently reach for their personal cards. The reason is rarely strategic; it’s psychological and functional. Personal credit is familiar, immediately accessible, and, in many cases, offers higher credit limits or faster approvals than business products.

Nearly two-thirds of personal-card use is unplanned, per the report. One in five SMBs primarily use personal cards for emergencies, nearly double the share that turns to business cards for the same purpose.

This creates a behavioral fork in the road: structured, predictable spending naturally flows into business products, and everything else flows into personal ones. More importantly, this behavior signals what the next generation of credit products may need to solve: a blend of predictability and volatility that defines the modern small business economy.

Read the report: SMB Growth Monitor: Small Businesses, Big Credit Needs

The report’s most important insight is that issuers may have optimized business cards for the wrong side of SMB credit behavior. They’ve built products for planned spending—even though a significant portion of total SMB credit activity, and nearly all high-stress spending, occurs in the unplanned realm that personal cards dominate.

The ideal product is not two different cards. It’s one card with a two-mode operating system — a card smart enough to recognize whether a business is engaged in stable operations or fire-drill problem solving, and capable of adjusting accordingly.

What SMBs ultimately want is functional recognition. They want their financial tools to recognize how their businesses actually operate. A florist navigating Valentine’s Day chaos has different credit needs from a consulting firm managing retainer cycles, but both need credit products capable of handling the unpredictable.

The two-track system persists because no single product yet bridges the gap. Yet.