Emerging Topic


One-third of American small businesses (33%) have no rainy day savings to help with unexpected expenses. While every business’ need for emergency funds is not the same, the lack of resources increases vulnerability to unforeseen events and expenses.

Businesses without emergency funds are more likely to have to rely on loans or gifts from friends and family (18% versus 11% overall) and credit cards (12% versus 8% overall) to keep their business open if they encountered unexpected expenses.

Businesses that have been operational for less than ten years, retailers, and women-owned small businesses are most likely to not have a rainy day fund (45%, 41%, and 40%, respectively). Gen X-owned businesses are more likely to have a rainy day fund compared to Baby Boomer-owned businesses (37% versus 31%).

Among the businesses who report plans to save in 2018, over a third (36%) currently do not have a rainy day fund, compared to 29% who are planning to invest more. A majority (60%) of those that plan to invest are also more likely to be comfortable with their business’s emergency fund than savers (50%).

This comes after the 2017 data showed only one-third of small businesses have a plan in place to deal with catastrophic events that could threaten their business. The vulnerabilities ranged from unpreparedness for natural disasters (65%) to inclement weather (65%) to preventing theft or intruders (50%). Unexpected events like these can cripple an unprepared business. Having a plan in place can go a long way in ensuring business continuity after the unexpected happens.

Expert point of view

The inability to cover emergency expenses can really destroy long-term financial planning if a business isn’t ready. Having emergency funds to cover the unexpected can mean the difference between hanging on after an emergency or hanging it up altogether. Small business owners would benefit from being as proactive as possible with saving in case the unexpected happens.

Aliya Wong
Executive Director
Retirement Policy
U.S. Chamber of Commerce

Backup plans for businesses
without rainy day funds