JPMorgan Chase: liquidity, digitization top priorities for business leaders

CHRIS STEVENS, JPMorgan Chase & Co.’s Rhode Island executive director of commercial banking, said liquidity and digitization have topped priorities for Rhode Island companies, as well as those across the country, as indicated in the Business Leaders Outlook Survey. / COURTESY JPMORGAN CHASE & CO.

PROVIDENCE – While optimistic for increased revenue and sales in 2021, liquidity remains a top priority for small and midsized businesses amid continued economic uncertainty, according to JPMorgan Chase & Co.’s Business Leaders Outlook survey.

The annual survey published Tuesday found that nearly two-thirds of midsized businesses, defined as those with $20 to $500 million in revenue, and one-third of small businesses, those with $10 million to $20 million in revenue, have increased their cash reserves in 2020 as a protection against future business disruptions. One-third of small businesses also expect to save even more in 2021, the survey found.

“The focus in liquidity, that cash buffer, was really something at the forefront of all our clients here locally,” said Christopher Stevens, who serves as JPMorgan’s executive director for commercial banking in Rhode Island.

While economic uncertainty brought on by the pandemic remains a top concern among businesses surveyed, a majority remained optimistic that the new year would bring revenue and sales growth. Still, optimism was tempered compared to the prior year’s survey, with 47% of small businesses anticipating improved performance compared to 60% a year ago. The 69% of midsized businesses expecting growth in 2021 was on par with the year prior.

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Whether Rhode Island – a state particularly reliant on a strong small business community – will be slower to recover than other states is unclear, Stevens said. While midsized businesses by virtue of their larger marketplace and potentially wider product appeal may be better positioned to “weather the storm” than their smaller counterparts, many of JPMorgan’s Rhode Island commercial customers have adopted “above and beyond” what national survey results indicate, he said.

Remote work, in particular, was implemented in some form by all of the bank’s Rhode Island clients, whereas nationally, 84% and 72% of midsized and small businesses, respectively, shifted to remote work, according to the survey.

The past year also brought a market increase in business’ embracing digital banking and treasury tools and ecommerce sales. More than half, 56% of midsized businesses upped their reliance on online banking, including electronic payments. Roughly 23% of small businesses implemented contactless payment options, with another 20% planning to do so in the coming year. And 14% of small businesses have shifted sales to be entirely from ecommerce in 2020, with another 12% planning to follow suit in 2021.

Nearly half, or 44%, of small businesses have also looked into online lending in the last year, with a quarter procuring an online loan and 56% expressing openness to an online loan in the year ahead.

JPMorgan’s survey reflects responses from more than 2,100 businesses.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

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