How many keyboard strokes have been used to write about small business and the banks? Too many to count.
Promises were given, rules are being written and debated in Congress and the Senate, ideas become laws – and still the economy is not moving forward in the desired pace.
Small business owners blame the banks for making it difficult to get a loan and expend the business. Banks are saying they have been burnt enough with bad loans and there are less and less applications for loans. In the last quarter the numbers of loans given by the banks went down 12%.
It seems like a ‘Catch 22’.
Are we doomed to continue this cycle forever? As with everything else that triggers the American ingenuity, there are solutions, even when it comes to banks and lending.
A recent poll by J.D Power and Associates wanted to check the current relationships between small business owners and their banks. They conducted a survey in July and August 2010 among over 6,600 financial decision makers in companies with revenues between $100,000 and $10 million, about their relationships with their banks.
The loyalty factor of small business to their bank has been declining drastically. If in 2008, 34% of small business owners said they will definitely go back to their bank, in 2010 the number dropped to 19%. Less than a quarter of people who do business with banks will not go back. In any other business it will be a cause for a major alarm.
The biggest complaints small business owners have is that they are not getting the support they need from the bank.
The poll shows that small business owners want a few simple things;
They want a point man, someone they can talk to. Someone that understands a bit about their business and someone that is available, either physically at the branch or through E mail.
They want to know in advance what the fees will be. Small business owner don’t expect to get something for nothing, but many complain about being blindsided by additional fees and charges they were not aware of when they signed the contract.
It looks like the big national banks are the ones who fail their customers in those two areas.
The list of the “Least Satisfied With” banks starts with Bank of America, Chase and Citibank. It continues with Wells Fargo and the rest of the big banks.
According to the poll, the ones who did get a good loyalty rating were the small regional banks like SunTrust in Atlanta, KeyCorp in Cleveland and Huntington National Bank because they are headquartered in Columbus Ohio as local banks.
I for one have used Suffolk County National Bank and Suffolk Federal Credit Union. These two are located in Suffolk County New York and still have a great personal feel to them.
Big banks have lost the human relationships with their clients. It may be high time to leave those big ones and go with the smaller local banks, with bankers like George Baily in “It’s a Wonderful Life”, a movie we will soon be seeing again on TV, come Christmas.
Leave a Reply