Kevin Ball, Head of Commercial Lending, Lorain National Bank
Doing business with a large bank may seem like an attractive option for a growing business. But at a large bank, a smaller business can get lost, as some banks are increasingly turning their focus to larger customers, says Kevin Ball, head of commercial lending at Lorain National Bank.
“A local bank can offer a number of unique value propositions, including experienced staff who are familiar with your industry, a flat organizational structure allowing access to decision makers and quick decision making and execution,” says Ball.
Smart Business spoke with Ball about how a local bank can tailor its services to your business’s needs.
How can partnering with a bank whose staff has decades of experience benefit a business?
That kind of experience is necessary in order to quickly understand a business and determine its needs and if the bank can meet those needs. Businesses often complain that banks take their information, then it takes forever for them to come back and make a decision.
If a bank can make a quick decision, even if the answer is no, and explain its reasoning, the relationship can be preserved, leaving the door open for future opportunities with that business. That sounds easy to do, but it is quite rare to find in the banking world.
How can industry-specific experience help a bank serve businesses?
If a bank has done a lot of business in a certain industry, its bankers have built up experience with and knowledge of that industry. Because they see different companies in the same industry and know how things are done, they can provide more than banking solutions; they can also provide insight into that industry and advise a business owner on something he or she may not have thought about.
Bankers at smaller, local banks are also more likely to sit on boards in the community. They are deeply ingrained in the communities they live in and attend functions and get to know the community’s business leaders. This can help them spot potential needs and allow them to talk with potential clients about their needs before they even walk into the bank.
What are some other pieces of the value proposition of a local bank?
A smaller, local bank doesn’t have layers of management and is more streamlined than a national or international bank. Bankers can visit a business owner and bring with them the head of credit, or the president. Those are the decision makers, and that gives them the opportunity to really get to know your business. There aren’t many large banks where you will get that kind of personalized attention.
In addition, smaller banks tend to be heavy participants in the SBA loan programs. That helps them mitigate some of the risks that might be involved in the transactions and can accelerate lending to small businesses.
How can partnering with a local bank help a business owner develop long-term relationships?
At a local bank with experienced bankers, business owners get to know their bankers. At larger banks, people are often trained by rotating them through departments, and business owners may speak with someone different every time they call the bank. Smaller banks are less likely to do that, and with an experienced staff, you are dealing with the same people every time you call, giving you the opportunity to build that relationship.
How do those relationships result in a better match of banking products?
It allows the bank to better tailor products to a business’s needs. The banker has time for work with individual businesses to find out exactly what they want and need, tailoring solutions to that, as opposed to a big bank approach, which often views smaller businesses as too small to do business with.
A lot of big banks say they’re lending, but they’re not. A business owner might find more success with a local bank, which will take the time to understand their business.
Are a local bank’s clients limited to the area?
Not necessarily. With today’s technology, the reach is broader. It’s no longer necessary for banks to have branches on every street corner. Modern treasury management provides the technology to scan items and use an Internet-based system. If you find a bank that offers great service and solutions that fit your business, its physical location isn’t as important.
How does the market for lending look going forward?
There is currently a good balance of activity and an increasing amount of optimism in the marketplace. Car dealers are having a great year so far, business is booming for some manufacturers and industrial space is starting to get tighter. Although the media tend to focus on negative stories, there are a lot of businesses that are thriving.
Kevin Ball is head of commercial lending at Lorain National Bank. Reach him at [email protected]
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