Banks can be small business owners’ best friends, providing a range of services, advice and a shoulder to lean on.
The definition of a small business can vary, depending on how much activity a business runs through a bank, according to Art Stevens, president of retail banking for Trustmark National Bank. “Accounts can trigger based on activity. Lots of banks segment customers by size,” he said. “We consider ourselves more of a relationship bank and encourage customers to bank with whomever they’re comfortable with on the lending side and on the deposit side.
“We do separate by activities, but almost every line of business within our bank has products geared toward small businesses, including free checking, business lines of credit and on through insurance and wealth management.”
Southeast regional president of BancorpSouth David Barrentine, who’s based in Jackson, says generally speaking, the market can be segmented into microbusinesses — those with sales of less than $1 million — and small businesses — those with sales between $1 and $10 million. “Another way to look at it is the size of loans needed,” he said. “More than 40 percent of our commercial loans are less than $1 million.”
However, he says BancorpSouth believes in tailoring its approach based on the customers’ needs. Therefore, it doesn’t have a rigid definition of a small business.
Patrick Garrett, business banking manager with Hancock and Whitney Banks, says his company defines small businesses as those with annual sales of less than $2 million. “We provide our small business clients with comprehensive financial solutions to assist them in meeting both their short and long-term business and personal goals,” he said.
This assistance is accomplished, Garrett points out, by developing a proactive partnership with the business owner. “Bankers are able to understand each business and their unique qualities, and then tailor solutions to assist the business and its owner in meeting current and future needs,” he added. “The proactive nature of this relationship is key in the business owner being able to achieve long-term goals.”
On the services side, Hancock and Whitney are able to provide all services, both deposit/cash management and loan/lines of credit, investments and insurance needed by a small business owner through various business life cycles as they assist them in achieving their goals.
“Currently, we’re seeing uncertainty in the economy and managing cash efficiently as the major financial challenges facing small businesses,” Garrett said.
Barrentine says BancorpSouth strives to provide more than just checking accounts and loans. “We want to understand the challenges small businesses face; what they lose sleep over. We find ways we can help meet those challenges. If going to the bank is a time-consuming chore, we can provide deposit services right in their offices with online banking services designed for small businesses.”
Stevens says Trustmark works with the needs of small businesses. “They may struggle with resources and information, and probably have no legal and accounting departments of their own. To the extent we can be an advisor and help them stay current with trends, we feel we can partner with them and help every way we can,” he said.
“We run a fairly robust small business resource on our website that has industry information and articles and blogs from financial writers. This is free internet access for true small businesses where they can transfer and wire money online.”
Trustmark finds that more and more small business owners are using that service; one that used to be reserved for larger businesses.
BancorpSouth’s Barrentine points out that small businesses needing to add equipment can find financing alternatives. Or when larger or more modern facilities might be needed, that acquisition also has financing options. “We help business owners grow their businesses,” he said. “We want to understand the viability of the business and the roll we might play to help achieve goals.”
A banker for more than 30 years, he has observed that a shortage of capital and cash flow are often big challenges for small businesses. “Cash flow is the lifeblood of any business, especially small businesses,” he said. “While a small business owner may have a terrific idea, service or product, bills and payroll must be paid, and they roll around quite regularly.”
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