Small business owners have many options when choosing a financial institution to meet their banking needs. While large national banks may seem like the obvious choice, many small business owners find that community banks offer a better option. Below are six reasons community banks are the better choice for small businesses.
1. Gain personalized attention
Small businesses require a banking relationship through personalized attention from financial professionals who know the local businesses and can provide tailored solutions to meet their specific needs. Due to a smaller customer base, bank tellers, advisers, and loan officers often learn their clients’ names and remember the nature of their work. This level of personal attention is often unavailable at larger institutions, where customers may feel like just a number.
2. Get faster decisions
Community banks are locally owned and operated. Decisions about loans and other financial services are made locally. Your request will most likely be made – or at least influenced – by someone you know and have worked with, resulting in quicker decisions and a more flexible decision-making process. At a large bank, decisions move up a chain of command to professionals who are disconnected from local business owners.
3. Build a long-term relationship
Community banks are more likely to develop long-term relationships with local businesses, as they understand the importance of maintaining a close relationship with small businesses. This relationship can be valuable to small business owners, as they have a trusted financial advisor they can turn to for advice and support. You can schedule a meeting with a banker to discuss your specific needs and solicit advice for achieving your goals. Your banker will know your corporate spending habits, loan history, and other details needed to make informed decisions.
4. Support the local economy
Community banks typically serve a particular geographical area; consequently, they tend to support their local areas. Community banks often support local businesses as they understand the impact they have on the local economy. This support can come in the form of lending, financial advice, and other services tailored to the specific needs of small businesses. Community banks use their profits to support local initiatives and organizations, which can positively impact the community. In turn, small business owners also invest in their local community by banking with a community bank.
5. Get flexible and low-cost loans
Community banks are often more flexible in lending practices, which can be a significant advantage for small business owners. For example, if your business needs a loan for purchasing inventory, your local bank may be more likely to provide a loan for that specific purpose. In contrast, a larger bank may only offer a general loan. Besides, compared to some larger banks, many community banks charge lower fees to small businesses, especially for services such as account maintenance and overdraft protection. Community banks often make fee structures simple, easy to plan and budget, and work to maximize your cash flow.
6. Community involvement
Community banks are active members of their communities and are often involved in local events and initiatives. This involvement helps to build relationships with small business owners and creates a sense of trust and community between the bank and its customers.
Conclusion
Community banks are a better choice for small businesses because they offer personalized service, local decision-making, community involvement, flexibility, lower fees, and the opportunity to build long-term relationships. By choosing a community bank, small business owners can receive the financial support they need to grow their businesses while also supporting their local community.
Key Takeaways
- Gain personalized attention
- Get faster decisions
- Build a long-term relationship
- Support the local economy
- Get flexible and low-cost loans
- Community involvement
