As positive as some of the signs are, however, the small and medium businesses that make up Main Street are finding the credit spigot is still not completely open, especially when it comes to the nation’s largest banks. That’s frustrating for small businesses that need credit to help grow their business, buy supplies and make payroll.
For the largest banks, it may be mostly about economies of scale. It’s likely just as easy for them to make a $50 million loan as it is to make a $50,000 loan, and less hassle. They are more inclined to deal with large business than small business financing. Fortunately for Main Street, community banks are filling the breach and providing the financing that small and medium businesses need to survive and thrive.
Usually defined as a bank with less than $1 billion in assets, community banks now play a significant role in helping small businesses succeed. Community banks lend out roughly 66 percent of their assets to small businesses, more than twice the amount of your average big bank. Community banks are also one of the biggest providers of Small Business Administration (SBA) loans in America.
First National Bank-Fox Valley, for example, was the leading SBA lender for Wisconsin among community banks its size in fiscal 2011, lending out nearly $11 million that created more than 90 jobs.
Lending is not the only advantage community banks provide to small business. The following are five additional advantages community banks provide their business clients:
- Community bankers know the community. Because these professionals are familiar with ‘the lay of the land” and the “local players,” they can be a valuable resource. They approach projects with a high level of local information and experience, an advantage to a borrower in particular. The decision makers at FNB-Fox Valley are no further away than the Neenah office.
- Community bankers will be around tomorrow. Many business owners and managers complain because their account representatives keep changing at large banks. This often results in spending valuable time bringing the new person up to speed.
- Community banks want your business. Instead of feeling the bank is doing you a favor, the community bank sends the message that it actually wants to do business with you and will work with you to help accomplish your goals.
- Community banks can move quickly. There is far less red tape and far fewer hassles at a community bank. Whether you’re dealing with the lending officer or the president, you are doing business with the top people. There are no layers upon layers in the approval process. You’re dealing with the people who are responsible for either making the decisions or recommending them. Saving time can give you a true competitive advantage.
- A community bank offers greater flexibility. There are certainly projects that fall outside the purview of a particular community bank. Some are larger than others. Some have particular interests. Nevertheless, when customers work with a community bank they discover a genuine desire to help customers and to work with them by taking into account their individual needs.
For many small and medium business owners, working with a community bank means working with people who are a lot like them, who operate in the same way they do. In other words, it’s a comfortable fit.
To learn more about what a community bank can do for your business, give us a call or visit our website at www.fnbfoxvalley.com.