Delivering Value to Small Business Customers

August 11, 2011 at 12:40 PM
The NFIB’s most recent Small Business Optimism Index (released this week) shows that small businesses remain more concerned about generating sales than finding additional credit. In fact, 92% of businesses surveyed reported that their credit needs were met or that they were not interested in borrowing.
While loan demand remains weak, commercial bankers should remain focused on other ways to provide value to their business customers, such as:
Helping with Expense Control. We have previously advocated providing online tools (similar to PFM tools on the retail side) to businesses to assist with monitoring and controlling expenses. While robust online banking platforms remain important, other methods of limiting expense account overruns have emerged. Citizens Financial Group’s accessCard Command credit card for businesses allows business owners to set spending limits for employees based on amount, category, merchant type, and geography – and receive real-time alerts if these limits are exceeded.
Maintaining Flexibility.  These are uncertain times for everyone; however, this provides banks with an opportunity to demonstrate high levels of service for small business customers in creative ways. In July, for example, U.S. Bank made its “Skip a Payment” program available to all customers (business and consumer) in Minnesota who were current on their accounts as of June 30th and were impacted by adverse events related to the state’s failure to reach a budget agreement. (The program allows participants to skip one payment on a loan without receiving late fees or impacting their credit score.) While this is an extreme example – and, fingers crossed, not one that will be repeated in every market – it may behoove regional and community banks to take another look at local events and think about ways (within reason) to help local businesses address these unique challenges.
Looking for more methods for delivering value to small businesses? We wrote about finding growth in small business banking for BAI Banking Strategies in January 2011 and about other ways to help small businesses succeed in September 2010.

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