Contrary to what many people think, community banks have the same set standards and operation power as big banks. They have the latest technology, including a customized fiscal spreading and tracking software that improves efficiency by allowing more flexible, consistent, quicker, and easier data management processes. Also, most are well-grounded, dependable, and governed by the industry’s regulations making your investments safe.
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If you are a small business owner, here are some of the reasons why community banks would be a preferred choice
- A More Personalized Service
The bank employees you met when opening the account are probably the same ones you will work with for a long time. You get to build a relationship with the bank, which means more personalized and flexible services. You’d want to work with a financial institution that understands your business’ needs and offers customized products. Large banks don’t have the time or capacity to provide personalized services.
- Better Loan Services
Small businesses may not have enough collateral or excellent credit score to guarantee higher loans. When you need a quick loan, you don’t want to use an automated service that may outrightly reject your application. You want to talk to people who understand your business journey, know your abilities, and don’t disqualify you based on a credit score or lack of enough collateral.
Most community banks are willing to finance their clients and sometimes bend the rules based on the relationship you’ve built with them. Larger institutions have stricter loan approval policies and may find it too risky to invest in small businesses. When they do, they have more stringent underwriting protocols and charge higher interest rates. For instance, you are more likely to qualify or know about SBA loans in a community bank than in a large bank. Community banks offer 60% of all loans lent to small businesses.
- Faster Processes
It might take months before a loan approval process completes in a larger bank, and the request can still get rejected even after the wait. Community banks, because they have built strong ties with their clients, offer on-demand services. It might take less time to have a loan approved, and in some cases, you can even request them to expedite the process but make sure you have all the required documents when applying.
Also, the decision-making process is faster because there are fewer people involved. Most large banks confess to having quicker loan approval processes, but they use automated services, meaning you don’t get a personalized review, increasing the rejection rate.
- Local Banks Invest in the Community
Local banks work to empower the local business community. A growing local community means more business for them. They can offer financial advice and customized products to boost business growth.
When you know the money you save with the bank helps other local small business owners, you are more determined to stay loyal to your bank. Indirectly, you will help another business thrive, so go ahead and bank more when you can.
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