Why a Local Banking Partner is Great for Business
January 23, 2024
Choosing a financial institution is often one of the first decisions you’ll make when you launch a business — and it’s also one of the most important.
“When you’re selecting a bank, it’s not just about having access to the right financial tools, though that’s certainly important. It’s also about finding experts who become a trusted extension of your team,” says Kara Sciarra, head of Small Business Banking at Northwest Bank. “In my experience, businesses benefit most when they find a banking partner who puts the relationship first.”
And, thankfully, that relationship-focused bank is likely closer than you think. Read on to learn how a local banking partner can help grow your business, as well as how to evaluate potential partners to find the right fit.
First thing’s first: What’s the difference between a local bank and a national bank?
As you might expect, a core difference between local and national banks comes down to geography.
National banks offer a nationwide network of branches and ATMs, while local banks serve a smaller region, like a single state or a handful of neighboring states. Your local branch might specialize in serving your small town or city, for instance. And if you’re in a big city, it might serve your specific neighborhood.
No matter which type of bank you choose, you’re likely to have access to a broad range of products and services. “At Northwest, we’ve made significant investments to ensure our banking experience stays competitive with national banks. We offer all the same products and services that big banks do, and we do it with a local, ‘small town’ sort of feel,” says Sciarra.
3 ways working with a local bank helps your business
Putting relationships front and center is good business. Here’s why a local bank can help you reach your goals.
1. A local bank has a deep understanding of the community — and your business’ place in it
Step into your local bank and you’ll probably see more than a few familiar faces. Bank staff typically live nearby: They’re your local little league coaches, they shop where you shop and they serve the same community that you do.
This means your local bank will instinctively understand the market for your business and the value you bring to the community — so they have the context they need to have meaningful discussions about your goals. “Many times, our clients are referred by or are someone we already know,” says Sciarra. “And because of our deep-rooted histories in our communities, we can hit the ground running when they come in.”
Those deep connections to the regional community also allow local banks to stay on the pulse of what’s happening in the community. As a result, your advisor can provide insight into how issues in the community could impact your business and be proactive in anticipating and meeting your needs.
2. At a local bank, relationships come first
Reaching your business goals is a long-term process. And when you work with a local bank, you’ll have an advisor to help you every step of the way.
“One of our core values is uncovering the ‘why’ behind your business needs and looking at the bigger picture,” says Sciarra. “It’s not just about helping you buy equipment for your business then moving onto the next customer. It’s about checking in on how that equipment impacted your business, how that could influence your next steps, and what we can do to help make that endeavor a success.”
This relationship-based approach encourages you to be strategic in your planning, prompting you to reflect on how you can adjust your business’ financial plan today to help you reach your business goals tomorrow. Crucially, the right bank will continue to offer support with trusted insights and expertise throughout your journey — not just check in when you need a new financial product or solution.
3. Local banks encourage you to take a holistic view of your finances
As an entrepreneur, the line between business and personal finance is often blurred. And building a relationship with a trusted advisor can help you meet your personal and professional financial goals.
“When we work with business owners, we’re looking at the big picture,” Sciarra says. “You’re busy running your business, and we want to support you by looking for opportunities to protect your financial future”
The right advisor can help you build a retirement plan for lifelong financial security, for example, and ensure you and the business both have the emergency savings to weather financial uncertainty. Importantly, an advisor can also help you plan for the next generation — including your plan for the business when you ultimately choose to step down.
How to find the right local bank for your business
Use these strategies to identify candidates, narrow your options and find the right bank for you.
1. Ask for referrals
The ideal banking partner should be plugged into the local business community, and your fellow entrepreneurs can help you find the right fit. Tap your network for other entrepreneurs in your industry to ask who they bank with and to gain insights into the type of customer service you can expect.
Pro tip: Seek out business owners who have already accomplished some of the goals on your roadmap to learn how the bank propelled their business forward.
2. Look for the right mix products and solutions
The ideal partner should have a range of solutions — checking and savings accounts, credit cards, loans, cash management solutions, and more — to ensure you can meet all your needs in one place.
Pro tip: Ask about the fees associated with the products and solutions you need. Fees are just one of many factors to consider to find the right solutions, but fee transparency is critical for sound financial planning.
3. Consider your client experience
Building a successful relationship relies on finding an advisor you ‘click’ with, so ask questions to gauge your relationship managers’ approach to banking. The ideal bank partner should take time to understand your business and be proactive in offering insights and solutions to help.
Pro tip: Check out the bank’s Help Center to ensure you can quickly and easily access client support — for example, via email, over the phone, over web chat, and in-branch.
We’re here to help
Whether you’re looking for financial products and solutions or trusted expertise, our dedicated local small business teams are here to help you reach your goals. Click here to find a Northwest expert near you and start a conversation that will help your business grow.