By Robert Estupinian
There is always a cycle that occurs in the banking world that may be affecting some small business owners. First, let me take you down memory lane. Many business owners remember the small and regional banks when they first appeared or we first used them. They promise and delivered exceptional customer service. I am talking about little things like recognizing you when you walk in, and offering to go help you out in any way possible.
Remember the old days when bank managers would pick up the phone and call you if there was a check coming through that might bounce?
How about the tellers who had been with the branch for so long that they knew your family, and knew what kind of business you own?
The truth was everyone in the bank was interested in building a long term relationships with you, and the bank was seen as an integral part of your community.
The cycle begins
Next, what happens is these small banks get big or are swallowed up by larger banks. Sometimes, even those banks get eaten up by even bigger banks. In many cases the relationship with you and your business is lost and forgotten. The people that you relied on are gone and a new impersonal bank emerges.
Despite all the promises of expanded conveniences and services, it is not the same. Little things start to pop up that never happen before. Credit lines on credit cards and business lines may be cut in half or canceled altogether. There are holds now placed on deposits and minimum balances required.
Fees start to appear on various services that previously were free. Finally, a whole new staff shows up who don’t know you and are more concern about meeting their quotas than servicing your needs.
To some this depiction may sound cynical and far reaching. However, to a growing number of small business owners it is something they deal with on a regular basis. Recently, a local business owner told me about the frustrations she is experiencing with her bank.
In her case, she started her banking relationship with a small city based bank that has since been acquired into a national brand.
Her merchant accounts have now been subject to long holding periods of 30 days or more because she has increased her business. Since, she is in a service business the bank is concern that there could be potential charge backs from her customers.
These holds are happening despite having this merchant account for over five years without incident. All this has affected the cash flow in her business. When she complained to the branch manager, she was offered a credit line to solve the problem. She did not want or need a credit line. All she wanted was the same trust her bank had for her over the previous five years.
Why this is happening
Accounts like this one are experienced more by small business owners rather than large companies. One reason is the size of the account and transactions. Many of the large banks are moving away from servicing the small accounts and have drawn their focus to larger depositors.
Back to where we all began
Instead of trying to persuade a large banking entity to change it is far easier to look for a smaller bank. One option is to consider a local credit union. You may be pleasantly surprised to see that a credit union can match many of the same services you are looking for. Best of all, in many cases you will find a working relationship that will make your banking life a lot easier. By their charter, credit unions exist for their members.
Alternatively, there are still some small regional banks that still provide the personalize service and care about long term relationships. This is where asking your fellow business owners for a recommendation and introduction is paramount.
The bottom line is you should not have to endure problems with your bank especially if it is hurting your business. Although it can be a hassle to change banks, in the long run you will have less stress.
One of the great things about credit unions is that anyone can join and the minimum amount to open an account is very reasonable when compared to national banks. So, begin by opening a second business account and develop the new relationship before you close out your existing business banking account.
Nature hates a vacuum
Eventually more and more small banks will open up to service all the customers being left behind by the large national banks. Then the cycle begins again.
At Bay Area Mastermind we provide our members with viable resources to help them meet the needs of their expanding businesses. This alone saves our members hundreds of hours hunting down solutions. Do you have a business or thinking about starting a business? Then you need to Test Drive a Bay Area Mastermind group meeting today.