- The Washington Times - Sunday, November 2, 2003

With Bank of America Corp. and FleetBoston Financial Corp. planning to merge, the two companies’ small business customers are likely wondering what changes they will see in their banking relationships.

It’s generally believed that smaller financial institutions such as community or regional banks are better for smaller companies, offering more personalized service and often lower fees than the nation’s biggest banks. So two big firms combining, or a large company buying up a smaller one, is usually not looked upon as good for small business customers.

But some small companies do end up with bigger banks, and they report that the big players really do try to serve the smaller customer.

Matt Zachowski said he was hesitant at first about taking his Manhattan public relations firm’s business to a big New York bank.

“I thought, we’re going to be a little pea in the ocean to Citibank, and what kind of service will we get?” said Mr. Zachowski, CEO of Intermarket Communications.

As it turned out, he said, “they’ve been very competitive throughout the entire time.”

Mr. Zachowski said he was pleased with his bank’s fees, rates and services. He found it was willing to give Intermarket short-term receivables financing when necessary, and understood that a public relations firm doesn’t have hard assets like a manufacturer that can be used as collateral.

In the end, of course, the choice of a bank comes down to what works for each small business — whether a bank can accommodate its particular needs, whether a specific bank provides a good fit.

David Bottone, who owns two convenience stores in the Providence, R.I., area, switched from a big bank to a smaller institution four years ago after he started getting hit with monthly $100 fees because most of his deposits were in cash. Before he made the change, he asked if the fees could be waived, but branch employees said they didn’t have the power to do that.

With a smaller bank, “I have a much more personal relationship with the branch manager, the tellers. I know who to go and see,” Mr. Bottone said.

Choosing a bank is a lot like selecting an accountant, lawyer or any other service provider. Company owners need to assess their needs, and shop around for a bank that will provide the best fit.

The considerations will differ according to the kind of business, whether it’s a start-up or a more-established firm and whether it needs capital. Does it need to bank online? Does it need equipment loans?

John Sheaffer, CEO of Sysix Technologies, an information-technology firm based near Chicago, said he uses a midsized bank that is clearly interested in working with a company such as his.

“We don’t want to be something that’s an anomaly,” Mr. Sheaffer said. “They understood our line of business.”

But Mr. Sheaffer says Sysix isn’t married to its current banker despite a satisfactory three-year relationship. He is always on the lookout for a better deal, and suggests other small businesses do the same.

“Build a relationship with your bank — talk to them all the time, let them know what you’re doing,” he said. “But keep your eyes open for a different banking relationship if you get a chance.”

That relationship really is critical. Mr. Zachowski recalled that his bank covered a check when needed. Mr. Bottone noted that his banker is more likely to be flexible if one can’t get to the branch by its 3 p.m. closing.

And having close ties to bank employees can bring benefits beyond banking. They might be more inclined to steer new business toward your firm — for example, if you are an accountant using a small bank, employees might give your name to other customers looking for someone to advise them on taxes.

If you need help choosing a bank, you can find tips online at the Small Business Administration’s Online Women’s Business Center at www.onlinewbc.gov/docs/finance/banker.html, or the Commerce Clearing House Business Owner’s Toolkit at www.toolkit.cch.com/text/P10_3200.asp.

Your accountant or lawyer can also help steer you to a banker who is right for you. And so can other small business owners whose circumstances are similar to yours.

You can also get advice from SCORE, the organization of retired executives, reachable online at www.score.org.


Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2021 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide