Despite the angst against banks that has been seemingly rampant as reported by media, there is one segment of the population that is satisfied with their banks: small businesses.
A J.D. Power and Associates report released a few weeks ago shows that overall satisfaction among small-business banking customers has increased from 2010. The study of 7,000 small businesses shows that customer satisfaction in 2011 averages 717 on a 1,000-point scale, up from 711 in 2010. The study, now in its sixth year, measures small business customer satisfaction with the overall banking experience by examining eight factors: product offerings; account manager; facility; account information; problem resolution; credit services; fees; and account activities. Satisfaction in 2011 increases across all factors, except for fees.
The same study showed that credit availability has increased, indicating greater stability and a return to some degree of normalcy within the small-business banking environment.
So while most small-businesses are happy with their bank, the question is: are you?
If not, chances are you bank with a big bank where you are probably treated like a number. Consider switching to a community bank like Bank of American Fork.
A good friend of mine made the switch 25 years ago when he was just starting out in the construction business. He shopped his business plan to several big banks in the area, all of which turned him down. That’s when he came into my office at Bank of American Fork. Together we worked out financing that jumpstarted his business. That friend is now a successful contractor who has built several multi-million-dollar buildings and continues to thrive today.
All banks are not equal and nowhere is that truer than when comparing community banks to large, national banks. Here are just a few facts that demonstrate the differences:
— Banks with assets under $1 billion (most community banks) represent less than 11 percent of all banking assets nationwide, yet they provide nearly 40 percent of the loans the banking industry makes to small businesses, extending credit that is crucial to job creation.
— 73 percent of small businesses using a small bank got the credit they sought in 2010, compared with 48 percent of those using a large bank.
— Small business owners are twice as satisfied with their primary bank if it is a community bank vs. a large bank (39% compared to only 15%).
Further, community banks serve Main Street, not Wall Street. They focus on responsible lending to borrowers who can repay instead of irresponsible subprime lending and, as the numbers above show, they are major funders of small businesses. When business owners apply for a loan at a community bank, they usually get an answer fast because decisions are made by a local committee that knows the business and considers more than just a credit score.
Community banks offer most of the same products and services as big banks, but usually at a lower cost. Small businesses can especially benefit from this by working with their community banker to create a package of products and services that exactly fits their needs at a cost that makes sense.
Community banks give back to local communities through volunteerism and monetary donations. They provide important financial education to the underserved. They are accountable to their customers and communities because they are friends and neighbors.
There are 26 million small businesses in the country right now and 34 percent of those do banking with the five largest banks. If you’re not satisfied with your big bank, there are over 7,000 community banks across the country and 21 right here in Utah that would serve your business well with personalized service, lower fees and products to help your company succeed.
Learn more about how Bank of American Fork is a good fit for your company by contacting a business banker today.