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Smaller bank, bigger service

Nowadays it seems if one big bank is not merging with another big bank, they're consuming the smaller banks, leaving communities with super-sized institutions.

The problem with these super-sized institutions is their readiness to up their fees while skimping on personal touch. Here's something worth considering: your local, community bank.

Small businesses, in particular, are in the best position to get the most from community banks. Community banks have remained competitive on price while also catering to the personal attention, flexibility, business understanding, and value-added services that small business owners desire.

With fewer customers than the larger banks, community banks can offer a great deal more personal attention. You can often expect your phone calls to be answered by someone who knows you personally, knows your account and knows how to handle your questions right away, rather than by a customer service rep looking at your account for the first time.

Sometimes, you may even hear directly from one of the principals in the bank. Bank presidents often want to meet new clients, and since many of these banks have just one office rather than many branches, it generally is not difficult to get in touch with the president if necessary.

At large banks, loan packages are often put together and then sent to a distant processing center for approval. This is a time-consuming, laborious process for everyone involved. It is also an impersonal process that often uses credit scoring as a way to judge loan applications.

Most community banks do not use credit scoring and place a larger emphasis on the trust in management and due diligence of the credit team in making their lending decision. Since decisions are made locally, clients are likely to receive a decision on their loan (and the money) more quickly than they would at a larger bank.

Through community involvement, the smaller banks have a better understanding of local credit culture and how aspects such as the cyclical nature of sales impact the small business financially.

By observing the business in person, the community bank has an enhanced awareness of the business's goals and operations.

Many small business owners wanting to expand their business have overlooked community banks as a potential source of funding, even though these banks generally have attributes that are important to small business customers.

When shopping for a lender, consider a community bank and make your decision on more than just price. There will likely be other important differences between what you will get with a community bank versus what you will get with a larger bank, and you may very well find that a community bank is the best fit for your needs.

Submitted by Sunrise Bank of San Diego

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