by Debi Enders
Smaller banks tend to lump individual customers and small businesses together under the general category of “commercial banking.” While these banks may make loans and provide other services to small businesses, they don’t typically have bankers who focus exclusively on companies with annual revenue of under roughly $3 million.
Banks that serve large companies and institutions – those with annual revenue over $3 million – ordinarily serve these customers through a separate division known as corporate banking.
The commercial lenders in these groups often don’t gravitate to small businesses because they are frequently less profitable than larger business customers. Think about it: A lender would have to make 100 small-business loans of $50,000 each to generate the same volume as just five $1 million corporate loans. Which kind of customer do you think this banker will spend more time with?
The fact is, small businesses have special needs that make them different from both consumers and big businesses. Their owners benefit from working with bankers who aren’t just in it to make a loan but take a true interest in their long-term success.
These owners often want a banker who will spend extra time with them, providing a sounding board for their ideas and serving as a trusted adviser as they navigate new or uncharted waters. They need bankers who have their pulse on the local community and can link them with people and resources they may need to grow.
The good news is, there are banks that recognize that small businesses are different and have special needs. These banks have staff who are specially trained to serve small businesses. Why? Because they know small businesses sometimes grow up to be big businesses, and they like to support the process.
Debi Enders (debi.enders@commercebank.com) is vice president, small business banking at Commerce Bank.
Submitted 8 years 120 days ago