While national banks are often a better choice for your business owing to their larger branch networks, and numerous product selections, community banks offer cheaper and faster services tailored to your business needs. Choosing a community bank business account not only benefits your business but also boosts your local economy. It creates local bank jobs, funds local businesses, and generates revenue that banks can reinvest in community projects. Community banks are woven into the fabric of many towns across the country. By providing essential financial services to local residents and businesses, community banks help them thrive in their own communities. This blog uncovers the benefits of using community banks for your business and highlights how it affects your community.
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THE BENEFITS OF COMMUNITY BANKS FOR BUSINESSES
As a business owner, you know how vital your presence and services are to your local community. When you choose a local community bank, they understand your needs better than banks with a larger scope. Here are several advantages of using community banks for small businesses
1. Relationship-Based Banking
When your business is based on relationships, you get more flexibility. This is one of the many benefits that a small business can gain when partnering with a local community bank. You know better than anyone that your business is based on your relationships with your clients. In fact, you probably know most of them on a first-name basis. When you apply for a loan in the US, they can credit the lending amount in your bank account. They can wire transfer it or if you accept ACH payments you will get paid through the ACH network. Another benefit of getting loans from community banks is that they get to know you, unlike national-level banks. Without learning your credit score, they are more likely to see you as a neighbor and offer you flexible payment terms to repay the loan.
2. Decisions with the Community in Mind
Community banks make business decisions by considering the local community in mind, and doing business with them can help you take a step towards the betterment of your locality. On the other hand, larger national banks play number games to make their business profitable and satisfy customers but in comparison to a community bank, they cannot make decisions for local companies. Interestingly, community banks hold a significant share of the small business lending market. In fact, community banks account for 36% of all small business loans, which is double their share of the total banking industry’s loans.
3. Faster Decisions
Due to a smaller banking network, making crucial decisions is easier for a community bank. In case your small business needs an urgent loan for machine repairs and you cannot continue without it repaired, getting a loan from a community bank is easier. While regulations and standards apply, those standards are often based on knowing you and your business. This way, you can get frictionless payments in the form of a loan from the community bank you need to thrive. Unlike big banks with their strict guidelines to get loans approved from headquarters, local banks can take a more flexible approach.
4. Collaborative Lending
While a local bank cannot offer your small business a huge amount of loan, it can serve numerous customers through a collaborative lending process. This flexibility allows them to cater to more community members and entrepreneurs. These members may include those who may not qualify for traditional loans from national banks with larger lending capacities.
5. Local Networking
Building a successful business is all about building relationships. Whether you are an experienced entrepreneur or just starting out, you know the power of a strong local network. Leveraging the local networking strength, a community bank can get you trusted suppliers and reliable service providers while also referring customers toward your company which makes it the cornerstone of growth. Thus using local networking, they can introduce you to the local players who can help you take your venture to the next level.
Final Word
Many small businesses need loans to fund their operations, or they may require assistance to resolve cash flow issues. While small businesses and startups can secure loans from larger national banks, obtaining a loan from community banks offers several reliable advantages, as this blog highlights their contribution to giving back to the community. Additionally, businesses can benefit from more flexible payment terms and policies tailored to their specific needs, something often challenging to obtain from national-level banks.
