While the needs of every business are unique, there are numerous benefits to banking with smaller institutions. Community banks tend to focus on the needs of the businesses and families where the bank has branches and offices, and lending decisions are made by people who understand the needs of the local community.
Community bankers have a vested interest in the community, which makes them great partners during turbulent times. Recently, community banks found themselves serving most of their small business customers through the PPP loan program initiated during the COVID-19 pandemic.
If your banking relationships have historically been with larger banks and you aren’t familiar with how community banks operate, keep reading to learn how you can benefit from the specialized services they offer.
Top priorities of a community bank
Community banks prioritize one thing above the rest: To benefit the immediate local community. From the executive team to the mortgage department, a community bank understands the nature of the local economy as it pertains to business owners and local professional industries. This intimate knowledge allows community banks to offer specific and individualized packages that meet unique business needs. As a business owner, you’re not getting the same service offerings as every other customer – you’re getting resources and options that will specifically help you succeed.
How community banks are structured
Community banks have the benefit of localized decision making within the region they operate in, which means you’ll find less red tape when it comes to making decisions. These bankers don’t need to take lending decisions outside of the state in which they’re operating. Oftentimes, the CEO, CFO and wider executive team are all in the same office – sometimes even down the hall from the rest of the banking team. Being under one roof means lenders can get answers to their customers quickly. Local banks also offer a more centralized underwriting process.
How to successfully work with a community bank
Finding a bank that's going to help your business is very important. As a business owner, you should look for a bank that understands the nature of the industry you’re in.
Even if you’re a startup and not bankable at the moment, it’s useful to open an account early on so you can begin forming a relationship with the bank. That way, when you need a line of credit, they already know you and your business.
While the requirements are often less rigid when working with a community bank, you will still want to be prepared for the loan application process by having a business plan, knowing your budget, and being aware of any assets that could be used as collateral. Having your financial affairs in order before applying for any loan will speed up the process no matter the type of loan you’re applying for.
When your business experiences growth, community minded banks can easily adjust their service offerings to align with your new goals. As a small business with big plans, working with a community bank like Paragon could be the best strategic move you can make.
Paragon Bank delivers innovative products and financial expertise, convenience, and a deep understanding of what both businesses and individuals need from a bank. In business or personal banking, lending options or wealth management, Paragon delivers cutting edge technology, an experienced team and the most service-oriented staff of any community bank.
