What They like and What's Ahead: A Peek Inside the 9th Annual Small Business Banking Conference
Britt, Phillip J., The RMA Journal
American Banker and RMA cosponsored the 9th Annual Small Business Banking Conference in Chicago at the end of October. Two sessions summarized here show what small business owners want from their banks and what's on the horizon for this market; watch for more from this conference in the February 2005 issue of The RMA Journal.
Personalized service is a top issue for small business owners
Every small company looks for a bank that can provide personalized service to meet its individual needs, agreed members of a panel of Chicago-area small business owners.
Gordon Campbell, CEO and founder of Award Concepts, Inc., said MB Financial, Inc. "treats us like a large company and gives us what we need." MB Financial is a $4.4 billion bank that has grown through aggressive acquisition of community banks throughout the Chicago market. The bank increased the product and service offerings to its customer as Awards Concepts grew--from a small, secured line of credit, to a larger secured line of credit, and then to an unsecured line of credit.
In selecting a bank, "we looked at service, not at interest rates," Campbell said. "Service means I can pick up the phone and [the bank] will provide everything we need and take care of our growth." Service to Campbell also means working with top people at the bank, rather than working with young, inexperienced bank managers and employees.
Small business owners often feel alone and fearful. So they need a bank that will take the time to understand those feelings and the business itself said Sharon Dalenberg, owner and president of Continental Courier, Ltd., a 300-employee company that banks with Fifth Third Bank ($21 billion), Cincinnati, Ohio.
Though she's pleased with the service that Fifth Third provides, as an entrepreneur herself, she will occasionally listen to other bank pitches as a courtesy. Banks' relationship managers need to stay on their toes, realizing competing institutions are always after their customers.
One of Dalenberg's major concerns stems from working exclusively with one banker at Fifth Third. The banker handling her account provides all the products and services she needs, meaning she need not go through one person for a credit line, another for a checking account, and so forth. While this is desirable, Dalenberg's concern is what would happen to her service if the person handling Continental's account left the bank.
She told a Fifth Third representative that meeting some of the product and service line managers would help alleviate that concern because it would give her secondary Fifth Third contacts.
Dalenberg cautioned bankers to do their homework before trying to land the banking business from a small company. "Another bank contacted us, but they sent someone who wasn't knowledgeable about our business," she said going on to say that "the person who came was different from the person who called me."
Consistency is another important factor for small business owners, according to Thomas Collins, president of Collins Engineers, Inc. Even with the mergers and acquisitions that resulted in the company's original community bank becoming part of Bank One, the banker handling the company's business has changed only five times in 25 years. The company also has been able to stay with the same local branch. There have yet to be any changes as a result of Bank One's merger with JPMorgan Chase.
Collins Engineers has offices in Chicago and in Ireland, so the company needed a bank that could provide letters of credit, as well as credit cards, direct deposit, and similar services that smaller businesses may not need.
Additionally, Bank One helps when Collins Engineers needs fast service, like short-term over draft protection. Collins explained that his company works under a number of government contracts, which are notoriously slow paying. Therefore, the company has occasionally needed Bank One to extend credit for a few days so that Collins could meet payroll. …