Best banks for small business people – large or small?
Wells Fargo just announced that it is “America’s number one small business lender.” OK, that’s great. They make more loans to small businesses than anyone else. But I’m here to tell you big doesn’t necessarily mean best.
If your small business needs a loan, the first place you should look is not a big lender, but a small one. Here’s why: If you have a local business and you need money for growth or expansion, a local bank will almost always be:
- Easier to deal with
- Faster to process your loan, and
- More agreeable to helping you.
Now, I’m really generalizing here, but, as my husband says, “We generalize for a reason.” In my experience helping people get small business loans, I’ve seen it over and over again that a person who can’t get a loan from a big bank like Wells Fargo will be able to get a loan from a small local bank. Sure, there are exceptions. I know someone in town here that had a great experience with a local Wells Fargo branch. But more often than not the big banks have to send their loans to committee. The local bank, on the other hand, can make the decision locally.
One of a bank’s interests, particularly in a small- to medium-sized town, is the types of businesses in town. Professional practices and other businesses run by professionals (insurance agencies, consultants, and financial planners, for example) are viewed as desirable by the local bank. These businesses help the town grow and prosper. Banks need good property values and thriving businesses. So they are willing to help businesses get started and grow.
One point in favor of larger banks is that they may be more willing to work with SBA. But I’ve seen this one go both ways. It depends on the bank.
What has been your experience with local banks vs. large national banks? If you have an opinion, let us know in the poll section.