The loan officer of a Midwestern community bank found a way to earn the respect of the Amish community the bank serves. How? He learned to drive a team of mules.
Not every community banker is going to go that far. But community banks are winning favor among private business owners by offering attentive, personal, local lending services, while avoiding larger banks’ “stubborn as a mule” inflexibility. Three factors make community banks better choices for private business owners seeking loans.
- Merits of every loan application considered. Community banks rely on much more than computer models when weighing loan applications. Their lending officers review every loan on the basis of their knowledge of the borrower, the borrower’s business plan and the local market dynamics. This means they can offer loans on a wider range of worthy lending applications.
- More autonomous decision making. Because they are locally headquartered, community banks aren’t beholden to out-of-state or even out-of-the-country business interests. Local community focus lets them be more flexible.
- Quicker, responsive decisions. At community banks, businesspeople don’t have to endure long lending processes and red tape. They work directly with their business bankers, who can be highly responsive and provide very timely lending solutions.
Community banks are also a wiser choice than online lenders. Negatives of online lenders include their typically higher interest rates and less personal lending services. In addition, many online lenders are still fairly new so they have statistically higher odds of going out of business. Such an outcome can create significant problems for borrowers.
For all these and other reasons, consider a community bank first when seeking a loan.
What factors guide your decision when considering borrowing from community banks?