Small Business Banking – 4 Questions Businesses Should Be Asking

This year National Small Business Week is May 5 – May 11. It’s organized by the U.S. Small Business Administration to recognize the contributions of all of the amazing entrepreneurs and small business owners across America. According to SBA.gov, “more than half of Americans either own or work for a small business and they create about two out of every three new jobs in the U.S. each year.”1 Small businesses are the backbone of our economy and rely on financial institutions to help them start up, maintain, and fuel growth. Whether you run a business or work at a financial institution it’s important to know what’s important to small businesses when it comes to choosing a financial institution.  

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Small Business Banking – 4 Questions Businesses Should Be Asking

May 2, 2019

Small Business Banking – 4 Questions Businesses Should Be Asking

This year National Small Business Week is May 5 – May 11. It’s organized by the U.S. Small Business Administration to recognize the contributions of all of the amazing entrepreneurs and small business owners across America. According to SBA.gov, “more than half of Americans either own or work for a small business and they create about two out of every three new jobs in the U.S. each year.”1 Small businesses are the backbone of our economy and rely on financial institutions to help them start up, maintain, and fuel growth. Whether you run a business or work at a financial institution it’s important to know what’s important to small businesses when it comes to choosing a financial institution. That way, as an entrepreneur, you can make the best decisions for your business or, as a representative at a financial institution, you can make changes to serve businesses better.

Here are 4 key questions every business, and every financial institution, should consider.

1. What is the reputation of the financial institution?

A quick internet search will most likely give you some idea as to how other small businesses feel about a financial institution. In fact, the Consumer Financial Protection Bureau (CFPB) collects and displays more than 679,000 complaints that nearly 3,000 financial institutions receive. The site allows you to see the financial institutions with the most complaints and even the financial institutions with zero complaints. It most likely won’t be the ultimate deciding factor for a small business, but it is a useful site when it comes to considering which financial institution to do business with and what complaints rise to the surface. How does your financial institution fare? Take a look for yourself.

2. What is the strength of the team at the financial institution?

There are so many traits that contribute to the strength of a financial institution when it comes to serving small businesses. First and foremost, it must take small businesses seriously. Any financial institution that claims this must have a solid personal business expert with experience helping other small businesses and entrepreneurs. In the case of local businesses, that person, and the financial institution, should be tied in with the local economy. They should understand the interests of the towns the financial institution serves. In the case of larger scale businesses, the financial institution must have experience that aligns. The strength of the team can also be seen in the decision making ability at the branch level. Can a manager make a decision on a loan? Does the financial institution even offer loans to first-year businesses? Lastly, the team should be able to offer additional solutions to its small business customers like payment acceptance and merchant solutions if needed. If these factors are important to the businesses the financial institution serves, then they should be important to the financial institutions that serve them.

3. How do other financial institutions stack up?

When you’re thinking about doing business with a financial institution, are you proactively comparing similar financial institutions? The following attributes might seem trivial, but when it comes to a small business anything that can maximize an owner’s time and capital is extremely important. Does the financial institution have everything a business needs from start-up and beyond so the business is successful and stays with them throughout their journey? Some of the key components to compare:

Loan rates – readily available at every financial institution

Service quality – just an internet-search away

Branch locations – how close are they to the businesses they serve

Online and mobile banking – is it easy? How’s the app? Do they have an app?

Hours of operation – this is extremely important

Business checking rates – this varies greatly from financial institution to financial institution

Fees – Every financial institution has them. What are they? How transparent are they? And how does the financial institution help minimize them?

4. How does the financial institution go above and beyond for its small business customers?

The last, and most certainly not least, important factor when it comes to small-business banking is all about the little extras a financial institution offers – we’re not just talking about free coffee and candy either. How is the financial institution a true partner to the businesses and entrepreneurs they serve? A great financial institution should understand the needs of their business customers and constantly offer up solutions to make their lives easier. For instance, if the business is a retailer or restaurant or any entity that processes transactions, the financial institution should be connecting it with payment processing and POS solutions. If the small businesses or start-up needs help understanding certain local regulations, the financial institution should be tied in with the local chamber of commerce and SBA.gov in order to connect those businesses with the right local and national regulatory contacts. It’s all about taking the extra steps to help small and local businesses succeed.

National Small Business Week is all about recognizing the amazing businesses in the U.S. If you run a small business it’s a great time to consider how, and if, your financial institution is supporting your goals. Likewise, if you run a financial institution, it’s a great time consider how you support those small businesses that fuel your operation.

 

If you’d like to learn more about Small Business Week visit SBA.gov. If you’d like to learn how TSYS can help your small business, give us a call at 1.888.845.9457. 

 

1. US Small Business Administration, https://www.sba.gov/national-small-business-week

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