An Experienced Banker’s Guide to Selecting The Right Type of Bank for Today’s Entrepreneur
By Barbara Hunter, Senior Vice President and Manager of Regents Bank’s Carlsbad Office
When entrepreneurs are looking for a bank, it is important to recognize that their relationship with a bank is one of the most important relationships a small business owner will develop. Therefore, this is one relationship for which an entrepreneur must give time and examination.
The gap between large and small banks is narrowing. Large banks offer the convenience of having many branch office locations and ATM’s. Small banks can be less convenient due to having fewer locations but are able to off-set this by offering courier service, online banking and remote deposit capture.
A good place for an entrepreneur to start with their search for a bank is by talking with other business owners. What bank do they recommend? Why? What types of services do they offer that make them stand out from the other banks?
Entrepreneurs should also consider a bank’s specialties and determine which ones specialize in serving small businesses. Not all banks are the same. Some cater to more of a consumer customer base while others focus on certain types of industries. Business owners should seek a bank which works actively with businesses. At the top of the list should be a bank’s knowledge of the unique needs of a small business. Business banks offer special features such as night depositories, online business banking services, courier services, business checking, and commercial loans and lines of credit. The bank should be FDIC insured, which ensures deposits of up to $250,000 are covered by the government.
Large banks depend heavily on the Internet to entice small businesses. They also have central loan processing facilities that receive and evaluate huge volumes of online applications using computerized credit scores to make fast decisions in a cost-effective manner, often within 24 hours. Credit-scored loans usually do not involve face-to-face meetings. For many business owners, this level of service and this service delivery system is perfectly acceptable. For other business owners, they would prefer the personal service provided by a small bank. Small banks tend to make local, hands-on decisions. The business owners can meet in-person with the decision makers of a small bank and agree upon a credit structure that best suits their needs.
The bottom line is that the business owner has to feel comfortable with the bank they select. The relationship with the bank should be viewed in the same sense that the business owner has with an attorney, a CPA and an insurance agent. A positive business relationship with a bank is a win-win prospect for both parties. This relationship is one of the keys to helping businesses overcome the certain challenges encountered on the road to success.
Barbara Hunter has been a professional banker for over 25 years, the past seven years with Regents Bank. Her main focus is helping businesses grow using a “consultative banking” approach which allows her to share her experience and help business owners make informed financial decisions. For more information on Regents Bank visit www.regentsbank.com.