Over the past year, during the COVID crisis, many banking lobbies have been closed, making neighborhood banks seem like a thing of the past. But for small business owners, this crisis has shown how important it can be to have a strong partnership with a local bank.

Thinking back to the start of the pandemic when communities were stranded, many small businesses had to apply for Paycheck Protection Program (P3) loans to cover the payroll. Due to the complexity of PPP loan applications, most banks first worked with their existing business customers. In the beginning, it was often companies with established relationships with local banks that received their emergency funds first.

Even in “normal times”, having a long-term working relationship with a local bank can be beneficial for a small business. Local banks have the same security and compliance requirements as large mega-banks, but a particular advantage of small local or regional banks is that they have more leeway than large banks when it comes to foregoing banks. fees or granting a more favorable interest rate.

If a small business owner needs something out of the ordinary, they might not have to go through so many hurdles with a local bank. If, for example, the business needs something like an inset signature, banks may only want to work with established customers they know well.

With a local bank, you are likely to receive more personalized service than with a national bank. We have noticed that there is often less turnover and turnover of employees between branches of local banks compared to national banks. If a business owner has a banking question, when she calls her local bank, she is speaking to someone in her area and not to a call center as can happen with national banks. And if there is unusual activity in a business account, a local banker will often pick up the phone and call a business owner rather than wait for the automated system to kick in.

Over time, small business owners can realize another unexpected and unexpected benefit of working with a local bank. Your local banker can become a good source of business development. Because they build business for their bank through networking and because they know your business well, they may very well become a good referral source for your business.

A final advantage of working with a local bank? By doing so, you are supporting the economy of your local community – not that of a national bank headquartered elsewhere.

Yes, there are some advantages to working with larger national banks. Among them, large banks often offer more comprehensive online services, for example, which can simplify and speed up transactions for businesses.

If your small business is looking for a local bank, the Association of Independent Community Banks (ICBA) can help you compare options in your area. In addition, the The FDIC BankFind Tool provides information on all FDIC insured banks and their locations, including current and historical data.

Of course, every business wants their banker to work well with other professional advisers, such as lawyers, accountants, and strategists. It may be advisable to contact other small business owners to inquire about their experience working with local banks.

Whether you choose to do business with a local, regional, or national bank, it’s always a good idea to take the time to develop and maintain a close relationship with your company’s banker.

Marilee Falco, CFP®, ChFC, is a Director and Financial Strategist at Agili, responsible for clients’ financial strategy and advice, comprehensive financial planning and investment management, as well as managing the company’s Bethlehem office. A certified financial planner^MT and certified financial consultant, she can be contacted at [email protected]. Cynthia Joyce, MBA, CPA is the COO at Agili, Bethlehem & Richmond, Va., Responsible for overseeing the company’s finance, budgeting, human resources and office operations. She can be reached at [email protected].