The benefits of banking local with a community bank

For all big banks offer, the trade-off is often access and local knowledge. Business owners want a banker who is a trusted adviser and often that’s not possible in a national bank where decision makers tend to be centralized at the corporate headquarters. Their distance means they may not understand the nuances of doing business in a particular community.
Conversely, local insight and advice, as well as personalized service, are among the mainstays of community banking. They understand where the local market is going and how other local businesses are adjusting to those trends because they are in the market, every day. That’s important when a business owner needs advice about whether or not conditions are right to expand or hold off and it’s not the type of advice local businesses get from a large bank.
Smart Business spoke with Kurt Raicevich, SVP and Chief Retail Officer at First Federal Lakewood, about how services differ between community banks and their national competitors.
What are the banking services most small businesses need?
All businesses need checking and savings accounts — places to house money, a mechanism to send it where it needs to go and a good accounting of those transfers and receipts via a monthly statement. As banks get more technologically advanced and businesses become more sophisticated, online banking services are of increasing value. These easy-to-access services, many available through smartphone applications at the touch of a finger, offer owners the ability to quickly see if a check cleared or a deposit posted.
Remote deposit is a service that enables businesses to make a bank deposit through a device installed at their place of business. It means not taking time out of a busy day to go to the bank or paying employees to make bank runs.
Access to capital is another critical need for companies that are experiencing rapid growth or need to invest in technology or capital improvements. Lines of credit can help cover seasonal issues or fund large orders that require a capital influx. Loans are critical to fund vehicles and equipment, or make facility improvements.
When it comes to accessing loans and lines of credit, speed is essential. Some community banks have responded to this need with programs that eliminate much of the paperwork by creating a digital approval process that business owners can complete at their desks. These simplified programs save owners valuable time while connecting them to the funds that are critical to keep their businesses running at full speed.
But most importantly, small business owners need trusted advisers who are plugged into the issues area businesses deal with. They need a sounding board for ideas and someone who can share best practices gleaned from their exposure to a broad swath of businesses.
What can local community banks offer small businesses that larger banks can’t?
Banks, whether large or small, have a similar menu of offerings for businesses. What can’t be offered by large banks is typically local decision making — a decision-maker with the authority to affect fees, rates, products and more.
At a community bank, a business customer is no more than a few feet away from someone who can provide a definitive yes or no on a decision. That’s because community banks maintain, first and foremost, a commitment to the businesses within a specific geographic area. This gives local banks a high commitment to the community and greater speed and authority when it comes to decision making.
What questions should small business owners ask themselves that will help them determine if they’re in the best banking situation?

Business owners should ask themselves questions about the direction they want to go. Are they looking to grow? How long do they want to continue to operate the business? What might an exit look like? What is standing in the way of the success they want to achieve? With these questions in mind, the next question should be whether or not their current bank can help find any of the answers. If not, it may be time to find a banking partner that can.

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