5 Benefits of Community Banking for Small Businesses
Do you have a small business? Tired of banking at impersonal national mega-banks? Tired of paying higher fees? Tired of not receiving the customer service you deserve?
Community banking might be the solution for you and your business. A community bank is a depository or lending institution that primarily serves businesses and individuals within a local geographic area. Community banking for small businesses is unique because it tends to emphasize personal relationships and individualized banking services. This consultative/ relationship-based approach can help small business owners receive the assistance they need in a timely manner, increasing operational efficiency and supporting business decision-making ventures that depend on the responsiveness of financial institutions.
What exactly are the practical benefits of community banking for small businesses? We came up with a list of five but trust us, there are plenty of advantages to community banking.
- Customer Service
- Prompt Decision-Making
- Relationship Management
- Fewer fees
- Supporting the local economy
Let us elaborate more on the five benefits of community banking for small businesses.
1. Customer Service
Your business is more likely to receive personalized attention since community banks serve a smaller pool of customers, they can really focus on building that business banking relationship to the needs of each client. With this big benefit, you will feel more confident in your banking relationship if you know your bank sees you as a name instead of a number. Community bankers take the time to know you professionally and personally. This benefit for community banking will help you expand your company or boost it up!
2. Prompt Decision-Making
Another benefit of community banking for small businesses is “quick decision-making.” Due to the structure of community banks, if you have any urgent or important requests you won’t have to wait for someone unfamiliar with your relationship or you’ve never met to review data in a file and render a decision or approve a request. Since community banks are local, your request will be made, or at least influenced, by someone you know and have worked with, resulting in quicker decisions. With John Marshall Bank we’re headquartered locally, which means we are familiar with the local economy. This also means you won’t have some based in NC deciding on a VA loan.
3. Relationship Management
Relationship managers at community banks tend to take the time to get to know their customers’ needs and financial histories so they can serve you better. Community banks also take a more holistic approach to issues like loans and business lines of credit. A recent article in American Banker said it well, “While consumers may no longer need bankers to assist with transactions, no amount of digitization will replace the friendly face offering knowledgeable advice.” Community banks like John Marshall Bank have expert bankers that understand the unique challenges each business owner faces within their respective industry and market.
4. Fewer Fees
Compared to some larger banks, community banks charge fewer fees to small businesses. Community banks often make fee structures simple, easy to plan and work around your budget to maximize your cash flow. According to Money-Rates.com, 43 percent of small banks’ checking accounts had no monthly maintenance fees compared to only 25 percent at large banks. Overdraft fees and ATM fees continue to rise in the megabank world as well. A typical complaint about big banks is that they typically charge higher fees for their services. Most community banks offer the same level of digital services compared to big banks at a nominal fee (if any). For example, at John Marshall Bank, we don’t charge for Bill Pay, Direct Connect, or EDI notices.
5. Supporting the local economy
A local bank hosts the accounts of local residents and businesses and invests right back into the communities we work, live, and serve in. Your deposits help other businesses stay afloat financially and improve the market for local businesses rather than national chains. You’re also helping to fund local jobs because a community bank employs local residents. Restaurants, bar owners, malls, and other types of businesses receive stimulation from this positive impact. For example, when big banks weren’t able to support their local mom and pop shops to process the Paycheck Protection Program loans, many community banks rose up to the occasion and were all over the news with helping small businesses like yours get the funding they needed. JMB processed nearly $150 million worth of PPP loans in 2020.
About John Marshall Bank
Do you have a small business in DC, MD, or VA? John Marshall Bank is a community bank dedicated to providing exceptional value, personalized service, and convenience to local businesses and professionals. Our dedicated Relationship Managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries. With a dedicated relationship manager, you can significantly increase operational efficiency and improve your cash flow through personalized service from your business bankers. John Marshall Bank is one of the largest community banks headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, Rockville, Tysons, and Washington, D.C. and one loan production office in Arlington, Virginia. Learn more at https://www.johnmarshallbank.com/business/.
