It’s Better To Do Business With Smaller Banks?
Smaller banks are handling the effects of inflation, in general, far better than their larger counterparts incurring only 6% in losses on average in comparison to the 15% in losses that many larger banks are experiencing.
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Big-name banks are struggling as inflation and high-interest rates send investment and trading opportunities plummeting, The market has a heavy cloud looming overhead and a recession on the horizon. While big banks are struggling, smaller banks seem to be flourishing and in fact, have much more to offer businesses looking for finance solutions.
In comparison to smaller financial establishments, most banking heavy hitters like JPMorgan and Bank of America are experiencing loss at a much greater rate. Smaller banks depend mostly on the business of lending and deposits instead of investment-type banking, and this has put them in a position of only a 6% loss. Bigger name institutions are experiencing losses of nearly 15% higher than their smaller counterparts.
When it comes to choosing smaller banks to handle small business transactions, there are many advantages. To start with, small businesses and smaller institutions go hand in hand. Small banks for small businesses just makes sense.
Customer service at smaller banks is of the highest quality. Smaller financial institutions hold employees for longer periods of time compared to bigger banks. This allows for a connection and relationship to be formed between the small business owner or everyday customer and the establishment’s employees.
The personal connection that small businesses have at smaller banks offers a level of understanding and trust that is unmatched. Beyond a personal level of trust and understanding, these smaller financial institutions have much to offer. In the same essence of a personal connection, smaller banks have a better understanding of the local market in which they serve.
With an understanding and personal knowledge of the local area, smaller establishments are more likely to meet the needs of small businesses that are working to improve and serve the community. Working together can only be beneficial for those involved and the local insight proves to be beneficial. Larger institutions may not be so empathetic to small businesses looking for loans or other financial opportunities without local knowledge.
Smaller financial institutions have also proven to offer better rates and terms for small businesses looking for credit card options and small business loans. Additionally, many smaller establishments require a much lower bank balance requirement compared to the bigger banks. When every dollar counts and you are just getting started in business, things like these can make or break.
Banking small also has advantages for the community. When the community in which a small business is located is thriving and profitable, the dollars just get recycled back into the community, back into the businesses, making for an all-around winning equation. When smaller financial institutions and smaller businesses work together, the community is strengthened and financial security is established.
When working to get a customer approved for a loan or a mortgage, smaller banks are more likely to go the extra mile to get things approved. This willingness to work hard for their customers is something all small business owners will find beneficial. It all goes back to personal connection and understanding the local market and doing what it takes to ensure the community and small business owners all thrive by working together.
