While large marketing departments can make big seem like the only choice, some decided advantages emerge when you select a smaller, local bank that may be more attuned to your specific needs. There are many options for banking out there, and knowing who you can trust to help manage your money is very important. At the end of the day, there are key advantages to banking locally.
Businesses almost always work to be personable. When you set foot into a local bank, you expect to be greeted by the local staff who knows your name and business. And while this may also be true for a larger bank, chances are that a local bank knows you a little bit better.
Smaller, local banks thrive on relationships. In some cases, these relationships have been cultivated over generations and form a different level of trust. With a local bank that has been around for a while, this trust is invaluable. And this trust generally translates into a better experience.
When it comes time for a loan, a local bank knows the local market better than anyone. The people who are helping to gather the documentation know the area. The people making the decisions behind the scene are aware of details that larger banks with faraway decisions may not know. A local bank also understands what small businesses need because the people who comprise the bank live and work alongside these businesses.
It’s more than simply Community Reinvestment Act (CRA) credits that compel local banks to participate in local life. Local bank team members are connected to the causes and passions that unite the community. This translates into activity with charitable organizations and causes.
It also translates into investments in the local economy when a bank grows. Jobs provided by the local bank help the community. Local banks are more likely to lend to small businesses in the area. Instead of moving elsewhere, the money invested by the local bank will end up local. All of this makes local banking that much more attractive, because some degree of money in the bank always ends up reinvested in the community, whether in the form of wages, economic investments, or charitable contributions.
While it would seem that larger banks offer technological benefits such as rapid decisions made with the latest in AI technology, this strength covers a potential weakness. Decisions about loans are made in distant places that may not take local factors into account. The decisions are made from departments that may be hundreds or thousands of miles away.
Conversely, when you bank locally, departments may be in the local community or located a few towns over where conditions are similar. You can schedule a face-to-face meeting with the people who are close to your lending decisions, and you can always ask questions to understand more about the process. The Banker you are working with is connected to the department making the decision and can offer input on your unique situation.
Decisions can also be made at a quicker pace. A local bank is working with fewer customers and can more readily focus on your request. Instead of working up or down a chain-of-command at a larger organization, the decision makers are involved in the process from start to finish. This tends to shorten the duration of each decision and any further detail requests can be communicated quickly.
Ultimately, working with a local bank offers three key advantages to larger institutions. Local banks offer the strengths of personalized service, local investment and simplicity over larger competitors that appear more resourced. As the 2021 and 2022 Newsweek Best Small Bank in South Carolina, First Palmetto Bank is a local bank recognized for exceptional customer service. We have helped many small businesses weather storms like COVID-19 via the PPP (Paycheck Protection Program) and provided businesses with key loans throughout the years. Learn more today about the Business Banking services at First Palmetto Bank.