How to Switch your Business to a Community Bank

The idea of switching banks can be daunting, especially if you’ve been with your current bank since you started your business. Luckily, community banks make it easy for small business customers to bank locally.

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. Community banking has endured the housing crisis, multiple recessions and a pandemic, just to name a few monumental moments, and can best advise you on protecting your business amid the ups and downs of the past several years.

And because community banks have strong ties to their communities, they can connect you to local accountants, attorneys and other trusted service providers who can help your business thrive.

When you are depositing your dollars into a community bank, you’re not only depositing your money into your community bank account, but you’re also depositing those dollars into your community.

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?
  • What can we do to make banking easier?
  • 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 you accomplish your business goals and objectives.

On the flip side, this is your opportunity to interview the community bank too. Ask the community banker how the bank gets involved in the community, what causes it supports, and how it gives back. In addition to asking questions about how the bank can work with your business for years to come, having that broader conversation allows you to align values where it matters most.

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, or a Social Security number if you’re a sole proprietor.
  • Business registration and formation paperwork.
  • Ownership agreements.
  • Business license.

When making the switch to any bank, expect to complete a fair amount of paperwork. But your community banker will walk you through the process. They understand small businesses and will do all they can to make it easier for you to make the switch.

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 your payroll provider with the new account information.

Q: It switching my business to a community bank worth it?

A: Absolutely! You’re investing in your community by keeping your dollars close. 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 banking 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 to see community banks in your area. Once you’ve found one that fits your needs, just pick up the phone and schedule an appointment with a community banker to learn how to make the switch.