Why Relationships Still Matter: How Community Banks Saved The Country During Covid-19
Small businesses and community banks laid the foundation for the prosperity enjoyed by the United States USM over the last 120 years, but today both of these segments are under siege. Small businesses and small banks compete daily with well-financed rivals that have more resources to spend on marketing, technology, and employees. Rapidly changing attitudes regarding online shopping and banking has accelerated these trends and made competing against larger rivals even more challenging. So how do smaller financial institutions differentiate? Focus on what they do best, building relationships and utilizing technology to augment said relationships.
The ongoing Covid-19 pandemic and ensuing economic collapse has exacerbated the situation faced by both community banks and small businesses, yet when the opportunity emerged to do some good, it was community banks that stepped forward.
The U.S. Small Business Administration reported that, during the first round of its Paycheck Protection Program (PPP), 20% of loans were funded by banks with $1 billion in assets or less, and 60% were funded by banks with $10 billion in assets or less. This first round of lending delivered $300 billion to 1.7 million businesses. Community banks are punching above their weight to help their partners in small businesses. Skyline National Bank in Virginia has only $700 million in assets, yet it approved $78 million in PPP loans. New Jersey’s ConnectOne Bank, with $7 billion in assets, has approved more than $400 million. In the fearful early days when the panic set in for small businesses, it was the small banks that answered the call.
Continue reading “Why Relationships Still Matter: How Community Banks Saved The Country During Covid-19” on Forbes.
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