Whether achieved by internal or external resources, community banks provide valuable support for small businesses. Here, bankers share how they build and maintain long-standing partnerships with their business customers.
By William Atkinson
By providing “bonus” services to small businesses, such as startup loan programs and referral services, community banks prove themselves to be reliable financial partners, with mutually beneficial results.
To achieve this, community banks use a number of strategies. Some rely primarily on their own staff expertise. Others rely on community resources. Others still rely on a combination.
“There have been so many times when a noncustomer comes to us with a transaction request, and the result is a complete 180 from where they first wanted to go. They become a loyal customer of our bank, because we showed them a better path.”
—Joe Allen, The Community Bank
One community bank relying on its internal talent is $596 million-asset The Community Bank in Zanesville, Ohio. “In many ways, we have always operated with the initiative to become a true advisor to our customers, but in the last few years, it has become a strategic focus to function this way on a daily basis,” says Joe Allen, senior vice president/central market leader. “Not only does it help out our customers; it helps our bank grow, and thus the community as a whole becomes stronger.”
The Community Bank focuses on the whole picture of a business—past, present and future—rather than just the transaction. “It happens multiple times a year when customers of other banks come to us to discuss a transaction they need,” says Allen. “They just aren’t getting what they think they deserve, or they feel they are not being well taken care of.”
Once it clicks for the business that The Community Bank is all in on helping it achieve its goals, the owners experience “a release of pressure.”
“They can go ahead and operate and know that our bank is behind them,” Allen says. “There have been so many times when a noncustomer comes to us with a transaction request, and the result is a complete 180 from where they first wanted to go. They become a loyal customer of our bank, because we showed them a better path.”
For $75 million-asset Community Bank Owatonna in Owatonna, Minn., providing business consulting and support services is the result of a cooperative local effort, primarily through the Owatonna Area Business Development Center, the City of Owatonna and the chamber of commerce. These three organizations work together to assist new and expanding businesses, says Steven Grams, president and CEO of Community Bank Owatonna. “We work with customers and refer business as their needs arise.”
The Owatonna Area Business Development Center was formed in 1988 as a business incubator. Today, it provides counseling services, financial planning, help with business plans, score referrals and rental facilities. The City of Owatonna has a grant and loan program to assist businesses with expansion opportunities. And the chamber of commerce is actively involved in recruiting and referring business to appropriate agencies. “As a result, we have all three organizations, as well as bankers, working together to meets the needs of new and existing business,” says Grams.
A winning combo
Providing business advisory services to small business owners is familiar territory for $2.9 billion-asset D.L. Evans Bank in Boise, Idaho. The SBA programs have helped the community bank, which is an award-winning SBA Rural Lender in the SBA Boise District Office, provide much-needed loans to small businesses in rural communities. “Our bank provides access to capital for small businesses that want to start or expand their business by utilizing the Small Business Administration 7(a), Express and 504 loan programs,” says Jennifer DeJean, vice president and SBA manager for D.L. Evans Bank.
The community bank partners with local organizations such as SCORE, the Small Business Development Center and the Women’s Business Center. “These organizations aid small business owners by coaching them with their business plan, their projections, their growth plans, etc., in preparation for the meeting with the bank,” says DeJean.
Collaboration in the community
Another bank relying primarily on local community expertise is $1.6 billion-asset One Community Bank in Oregon, Wis. “We don’t have a specific training or education program targeted toward the small businesses in our communities,” says Steven Erickson, its chief sales officer. “Instead, we partner with the organizations that already have a robust market share in this space, and, as part of our onboarding process, we start preparing our client-facing colleagues with the tools necessary to make a meaningful impact in these discussions.”
One Community Bank has excellent relationships with the nonbank small business advisory programs in its south-central Wisconsin market. “SBA’s SCORE program, for example, whose advisors are well known to us, have worked with several of our clients in the beginning stages of the entrepreneurial endeavors,” says Erickson. “Likewise, the University of Wisconsin–Madison’s Family Business Center has worked with some of our more established businesses on the growth and succession planning aspects of their companies.”
The community bank is also a member of the Wisconsin Economic Development Corporation’s Business Development Loan Program, which gives it the opportunity to assist local businesses with their capital needs while also providing guidance and pro forma review prior to funding.
This philosophy of growing in tandem with its business clients has been part of One Community Bank for decades. For example, Mark Mortenson, owner of All-Color Powder Coating, got his first business loan from the bank almost 30 years ago. “Since then,” says Erickson, “we’ve grown our bank alongside [All-Color Powder Coating], providing the means necessary for the expansion of [Mortenson’s] business, as well as the kind of partnership every business owner desires during the recession and now the pandemic. His company is now one of [the town of] Oregon’s largest employers.”
William Atkinson is a writer in Illinois.