Submitted By: Walter C. Clarke, Principal Vice President, Head of Small Business | Burke & Herbert Bank & Trust | Member FDIC |

When it comes to business banking needs, small businesses have been underserved by big banks. Those who have come to expect more from their banking relationships are discovering considerable gaps in the service experience. The most significant gap is the lack of a tangible personal connection, which typically translates into a transactional-based relationship. 

Business owners often have to work with three or four banking “specialists” from lending, banking, or treasury management with no coordination of banking solutions, much less a single point of contact that provides any business/banking relationship continuity. This experience often leaves business owners feeling as though the bankers don’t really understand their businesses, and the products they offer are “one size fits all” solutions. 

Why Local Banks Make the Best Strategic Partners for Small Businesses 

Regional and community banks have the scale to offer “big bank” products and services. Yet, because they’re geographically centered in a specific region, they can provide more “localized” services.

It’s Personal 

More importantly, businesses are more likely to receive personalized service with a local community bank than they would from a national bank. There is more continuity in the staffing of local banks, leading to deeper and more productive relationships. When business owners call their local community bank, they can easily reach their relationship manager or business banking specialist. Moreover, community banking representatives like to make a habit of checking in with their business customers from time to time to stay in touch and make themselves available when advice or assistance is needed. 

Partners in Growth 

Community relationship bankers are adept at developing business for their banks. They have substantial local networks of business owners. They also have an interest in their business clients’ growth. As such, they are an excellent and willing source of referrals for their business clients. 

More Flexible Lending Guidelines

Community banks typically make loan decisions by a local committee, not some impersonal computer located across the country using arbitrary credit scoring based on proprietary criteria. When your local business bank knows you and understands your business and your ambitions, your character, and relationship with the community, these factors rise to the top of considerations for approving loans. 

The Time to Start a Strategic Partnership with a Bank is Now 

Many businesses wait until they need capital before calling on a business bank, where they are an unknown quantity. The time to build a relationship with a bank is before you need capital. Business bankers are always interested in developing new relationships and are willing to share their experience on how to steer your business to success. They know your business will need capital at some point, so getting to know each other now makes for a more productive relationship later.