Business banking: How to switch to a community bank
The idea of switching to a community bank from your current bank can be daunting, especially if you’ve been with that bank since you started your business. Luckily, community banks make it easy for small business customers to make the switch.
Unlike big banks, community banks offer a long-term relationship that pays off over time, especially when it comes to securing loans and growing your business. Plus, you’ll be supporting a financial institution that invests in you and your community.
If you’re a small business owner who’s considering making the switch to a community bank, here are six frequently asked questions about the process.
Q: What do I need to know before I switch my business to a community bank?
A: Community banks naturally understand the needs of small businesses because they are small businesses themselves.
Strong advocates for small businesses, community banks work hard to ensure their customers get the services they need to grow their businesses. And because community banks have strong ties to their communities, they can connect you to local accountants, attorneys and other trusted service providers that can help your business thrive.
For many entrepreneurs and small business owners, it’s the personal touch that matters most. Access to decision-makers and bank representatives who also act as trusted advisors to your business can mean the difference between securing that loan your business needs to grow or losing prospective business to the competition.
If you’re looking for a trusted partner focused on helping your business succeed, a community bank might be right for you.
Q: What should I expect during my first meeting?
A: The first step in switching your business bank accounts to a community bank is to sit down with a bank representative to discuss your small business’s short-term and long-term business and banking needs. During the initial meeting, a community banker will ask you a series of questions to understand your needs and preferences, such as:
- What products or services does your business offer?
- What banking products and services are you currently using?
- Generally speaking, how much money comes into and goes out of your account monthly? Annually?
- What is your preference for paying bills?
- Will you be making mobile deposits?
- How many checks in a month do you write on average?
- Do you require a line of credit?
Once the community banker understands your business and its needs, they will recommend specific products and services to help accomplish your business goals and objectives. It’s important to know that community banks offer many of the same types of products, services and technology that larger banks do, but with a higher level of service.
Q: Is switching my business to a community bank complicated?
A: Opening a business account at a community bank is easier than you might think. Your community banker will guide you through the process. Most community banks offer a switch kit that includes a checklist and step-by-step process to help make the transition easier.
As a first step, be prepared to provide the following information:
- Employer Identification Number (EIN), or a Social Security number if you’re a sole proprietor
- Business registration and formation paperwork
- Ownership agreements
- Business license
When making the switch, expect to complete a fair amount of paperwork. But your community banker will walk you through the process, focusing on what’s most important, including any added fees. They understand small businesses and will do all they can to make it easier for you to make the switch, including bringing the paperwork to you.
Q: What happens after my application is successful?
A: Most small businesses start by opening a business checking account. During the account opening process, community banks will tell you about other services and products that can help with business expansion and growth. Although services may vary bank to bank, they include cash management services, debit and credit cards, and small business loans, to name just a few.
Community bankers will also advise you on how best to transition your accounts from your current provider. Most will advise you to keep your accounts open at your existing provider for 90 days to allow sufficient time to transition the accounts.
For example, you’ll have to stop using your old account, transfer all automatic payments to your new account, and notify your service providers of the change. You’ll also need to provide their payroll provider with their new account information.
Q: It switching my business to a community bank worth it?
A: In short, absolutely! You’ll gain an advisor you can trust, plus you won’t have to give up the products, services or technology you get from your current bank. Your new community bank won’t treat you like just a number—they’ll understand you, your business and your needs. And you can rest easy knowing that your bank will be there for you and your community for the long haul.
Q: How do I find a community bank near me?
A: ICBA’s Bank Locator tool is a great place to start. Just enter your zip code and you’ll see community banks in your area. Once you’ve found one you think will fit your needs, just pick up the phone and schedule an appointment with a community banker to learn how to make the switch.