Explore the many benefits of community banks for small businesses: from personalized service to community support, and unlock long-term success today.

When starting a small business, deciding who to bank with can be a challenging decision. Large financial institutions, such as regional or national banks, may draw attention with expensive commercials or cutting-edge mobile banking apps. Still, small business banking locally has several often overlooked advantages.

Small businesses that bank locally can take advantage of various perks from having personal relationships with community bankers and an organization that deeply understands the community.

1. Personalized Service and Relationships
   One of the most important community bank benefits is the personalized service and relationships. Larger financial institutions often provide impersonal services with an eye on growth and profits. At a local bank, community bankers put their focus on forming relationships with small business owners, resulting in customized service and a deep understanding of local issues.

   A small business owner can visit a community bank and sit with a trusted banker to discuss managing challenges or account assistance. This supportive environment allows business owners to speak openly about financial challenges or ask for advice. A personal relationship means small business owners can attain more guidance and advice from a banker they have faith in rather than a bank employee from a large institution they are unfamiliar with.

2. Faster Loan Decisions and Flexibility
   Small businesses that apply for a loan through large or national banks will usually have their requests reviewed by someone they haven’t met. This person may live in a different state and will make a decision simply by reviewing documents in a file. Large banks often have inflexible rules when it comes to underwriting loans, making for a drawn-out process that is more likely to lead to rejection.

   One of the significant benefits of banking locally is faster decisions and more flexibility regarding small business loans. Applying for a small business loan through a local bank means someone that you have a personal relationship will be considering your request. The local decision-making process will cut out unneeded bureaucracy and provide access to funds quickly. Local banks are often more flexible with loan requirements, than larger banks.

3. Competitive Rates and Fees
   Community banks offer many of the same traditional banking services as national chains, but often with more competitive rates and fees. Because community banks are smaller than larger institutions, business banking generally costs less, leading to fewer fees and better interest rates. Community bankers and business owners can develop personal relationships over time. Long relationships can establish trust, making it easier for small businesses in good standing to negotiate favorable rates and fees.
4. Community Investment and Support
   As part of the community, local banks thrive when the rest of the community does. When community banks provide funding and opportunities for local businesses, it benefits everyone. Local banks are more likely to consider deals that prop up local ventures as it may result in creating local jobs and bettering the local economy. More jobs and a better economy will lead residents to open a community bank checking account, creating a mutually beneficial cycle.

   Local banks often invest in and support the community in other ways. Community banks hire local residents and support local businesses by purchasing local inventory, such as equipment and utilities. They further contribute by sponsoring events, donating to local charities, and helping fund development projects, strengthening the community.

5. Greater Flexibility With Products and Services
   Because local banks have deep connections with the communities they serve, they have a better understanding of the needs of the residents and small businesses in the area. Community banks understand their region’s challenges, opportunities and market conditions, allowing them to provide tailored financial services and products that offer solutions. For example, a local bank in a coastal community may provide specialized loan packages to hurricane-proof office buildings, and a community bank in an area that relies heavily on the agricultural industry may offer customized financial products for farming equipment.
6. Improved Customer Service and Accessibility
   Community banks offer excellent customer service and accessibility compared to large banks that aren’t as in tune with local needs. Community bank customer service excels because their familiarity with the community’s specific circumstances allows for more specific banking advice and support. Local banks also prioritize personal relationships and go out of their way to provide top-of-the-line service.

   National banks may not respond quickly to emergencies or matters requiring immediate attention, but local bankers familiar with small businesses will. Community bankers are more likely to provide timely responses and communicate after hours than bankers at larger financial institutions.

7. Increased Stability and Resilience
   Community banks are largely more stable options for banking customers than large banks. Larger financial institutions are more likely to have policy changes, which results in adaptation on the part of the customer. Local banks focus on growing and developing relationships with their customers.

   Because community banks have roots in their local economies, they are more likely to be prepared for economic instability and can adapt to local circumstances. When a community faces hardships, a local bank may be able to adjust rates and policies to help prop up local businesses and maintain stability. In contrast, larger financial institutions may look to maximize profits.