Choosing the Right Financial Institution Vital for Small Business Growth

2013-09-29T07:30:00Z Choosing the Right Financial Institution Vital for Small Business GrowthMichelle Krueger
September 29, 2013 7:30 am  • 

Defined as businesses with 500 employees or less, small businesses (corporations, limited liability companies or proprietorships) contribute to local economies by bringing growth and innovation to the communities where they are established. While small businesses help stimulate economic growth and provide employment opportunities on their own, they also support the efforts of larger businesses within the same local area which often rely on them to provide a variety of specialized functions through outsourcing.

Small businesses are the engine of our economy, creating two out of every three net new private sector jobs and employing more than half of our nation’s workforce, according to Jeanne Hulit, Acting Administrator of the US Small Business Administration (SBA).

Typically established to carry out the vision of a single person, partners or a very select group of like-minded individuals, small businesses do not always stay small. Some, like Apple, Ben & Jerry’s, Microsoft and Nike, start off with a simple idea and grow into major national/international players.

When thriving local businesses remain in a community over time, they can make great contributions to the overall quality of life. Along with paying taxes that support local police and fire departments as well as schools, the owners and employees of these businesses are usually quite dedicated to improving the places where they live and work.

A great source of strength for any community, entrepreneurs and small business owners wear many hats. From researching and developing their products/services, to acquiring and retaining customers to keeping track of their legal and financial matters, these people do it all.

That’s why it’s beneficial for them to establish a relationship with one financial institution for all their personal and business banking needs.

While the basic menu of available products is fairly comparable from one institution to another, there’s no mistaking the fact that the right relationship manager can be a tremendous asset to any business.

“Your relationship manager should be an integral part of your business just as your attorney or accountant is,” Scott Steinwart, Senior Vice President and Business Banking Manager at Citizens Financial Bank, said. “The right relationship manager can help you navigate the ever-changing business landscape so you can take advantage of opportunities for success. What we provide – the people and the service – is what sets us apart. We know there are some great competitors out there, so we have to be on top of our game at all times.”

Any reputable relationship manager needs to understand the community you do business in and be familiar with the market and your competitors. Since the name “Citizens” was agreed upon by a group of local investors with a total of $6,410 in 1934, Citizens Financial Bank has remained a community bank with the personal service you expect, including an exceptional group of trusted advisors – the Indiana team has more than 240 years of combined experience – that works hand-in-hand with business clients.

Now offering 20 full-service locations throughout Northwest Indiana and the neighboring Chicagoland area, Citizens is well-equipped to understand and address any banking needs while serving as a financial partner for your business.

“In business banking, it’s our goal first and foremost to thoroughly understand everything we possibly can about the industry a client is engaged in,” Steinwart explained. “Then we want to take a close look at how the client fits into that industry, identifying specific challenges and opportunities. From there, we can determine specific objectives for this particular business, after absorbing and analyzing all the information. Throughout the entire process, we want to be a sounding board strategically for our clients, and are able to pull in other experts from the bank as well. We are extremely fortunate to have great access to our senior management here. Everyone including the president has a long background on the commercial side, and that adds value for our business clients.”

Whether you’re just starting out or ready to take the next step in your business, the relationship you establish with your bank can set the tone for financial success.

“You get to meet a lot of entrepreneurs in our line of work, and their mindset is very different from ours,” Steinwart added. “We come to work everyday and earn a set paycheck every two weeks. They put everything they have – their heart, soul, money and time – into their business, and they employ the masses. Sometimes they hit a home run, and sometimes it doesn’t work. It’s our job to help them reach that next plateau or help them get back on their feet and restart. One thing we do share is our love of the community, and that’s part of the foundation these relationships are built on – our mutual community connections. Whether it’s through serving on the board of a Chamber of Commerce, volunteering at a school or nonprofit event or meeting at a church function, we all share the same community.”

That, along with size and product fit, is what makes a community bank the right choice when it comes to meeting the unique needs of small businesses. While large financial institutions prefer to provide service for large accounts near and far, community-based institutions are focused on working with the businesses in their area alone.

“We are here, living in the community. We can draw on that personal experience as well as our professional experience in helping others in similar industries meet their financial goals,” Steinwart said. “In our case, management has emphasized a partnership between our retail centers and commercial banking. There’s a ton of overlap between personal and business banking for our clients so it just makes sense to work hard to work as a team for them.”

Since every business is unique in its cash cycle – how and when cash comes in and goes out, the same solution never quite fits the same way from one to another.

“Even though all banks offer similar products since we follow the same regulations, there’s always going to be a range of solutions in different situations,” Steinwart explained. “Sometimes it takes a fresh set of eyes to find the right one. For example, we met with a prospective client who has been the owner of a family business for 35 years. It’s a combination wholesale, retail business that’s very successful, with a very special niche. The owner was upfront about his fear of change, but also the need to embrace it. In the past, he used his own cash and never borrowed money.

However, now he was looking at purchasing some new equipment and increasing his inventory. That’s really the bread and butter of what we do, finance the purchase of land or equipment and provide working capital. We were actually able to offer a few possible solutions based on his unique situation. As a result, we hope to gain his trust, and his business.”

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