Did you realize that most companies spend more time researching office equipment than they do researching which bank to use? The research process in finding the best bank should take time and should be just as important as hiring a new employee or relocating to new space.
First Steps in Finding a Bank
Before you begin researching different banks and their offerings, you must decide what financial services you need at the present and in the future. Some basic requirements your business might have could include: a line of credit, online banking, investment advice or equipment loans. And in five years, will the size of the credit line be viable to execute your company’s growth strategy, or can your bank provide 401K services that will meet your employee’s needs? Once you understand your banking requirements for the present and in the future, dig deep to find which bank will most adequately meet those needs.
After you have a better understanding of what you may need from a bank, begin by researching which banks specialize in, and provide those services. Once you have a handful of small and large banks, give them all a call. Ask poignant questions like what are their banking fees, loan capabilities, interest rates, business benefits etc. This will help you narrow your list down to just a few. Then personally meet with these bankers. You will be able to get a feel for which banker you would prefer to work with and if they would be willing to work with your needs.
Community Banks Vs. Large National Banks
Benefits of a Community Bank – Community banks can be an advantage to a business because of their local market knowledge. They are also more likely to issue loans to small businesses. According to Federal Deposit Insurance Company 2009 data, small and midsize banks control only 22 percent of all bank assets, but they account for 54 percent of small business lending. No doubt the Small Business Association’s loan incentive has also given banks confidence to offer loans to small businesses because the loans are federally subsidized and protect the bank from default. Another positive about community banks is their flexibility to give you a loan based on character, rather than credit reports alone.
Benefits of a Large National Bank – Large, national banks often times have lower interest rates and are more likely to issue corporate credit cards. A larger bank typically has additional services for businesses such as business support seminars, accounting assistance, help with online trading, etc. (See below for event announcement)
Each bank, large or small, will have different specialties, so research which one has the majority of what your company needs. Keep track of each bank’s overall fees and perks in order to find which one offers the greatest benefits for your business.
And remember that loan rates and services are frequently changing, so keep a continual, periodic search for the best bank, and don’t be afraid to switch banks. This will encourage your current bank to work harder to keep you as a customer, and it will help ensure your business is getting the most benefits possible from your bank.
In Honor of National Bankers Month, Verity Commercial is inviting M&T Bank to help business owners understand how to put your best foot forward when working with your banker, and how your banker can help your business.
Join us for a discussion on an underwriter’s perspective on business banking. The discussion will include:
Date: April 30th, 2015
Time: 8:00 – 9:30 am
Location: Reston Chamber of Commerce Building
1886 Metro Center Dr Suite 230
Reston, VA 20190
Light breakfast will be served
Please RSVP by April 23rd to Himan@mtb.com or 703.464.4092