Here’s Why Small Businesses Like Small BanksMarch 3, 2016 | By: deBanked Staff
Small businesses like small banks.
The Small Business Credit Survey released by the Federal Reserve revealed that small businesses like doing business with smaller banks mostly with rate of approval and customer satisfaction.
Small banks approved at least some of the amount requested for 76 percent of applicants, while large banks approved 58 percent of the applicants. And when it came to customer relations, small banks scored a satisfaction score (percent of firms satisfied with the experience) of 75 while the big banks earned a score of 51.
And while banks still dominate as an advisory and credit channel, the survey suggested that 30 percent of microbusiness applicants and 22 percent of small firms ($100K–$1M in annual revenues) applied to an online lender, presumably because these applicants consider online lenders to be as credible as the big banks and despite the lower interest rates, the loan difficulty process and the wait for approval has the small businesses seek alternatives to the traditional bank credit system.Last modified: March 3, 2016