Small business owners don’t typically get a lot of attention from banks, but Bank of America has set out to change that. Recognizing that running a business is a time consuming job, they’ve hired hundreds of small business bankers whose job is to reach out directly to their small business customers.
Small businesses don’t usually get a lot of attention from big banks, but during the last year, Bank of America, has hired hundreds of small business bankers across the country. Their mission: to build relationships with small business customers and provide them with convenient access to local small business expertise and a dedicated resource who knows their business. Towards this end, small business bankers will consult with small business owners at their place of business and assess their companies’ deposit, credit and cash management needs.
One of the areas where the Bank of America has hired a significant number of small business bankers in recent months is the tri-state New York Metropolitan area. (Business Know-How is located on Long Island, which falls into the tri-state area.) The area is home to close to 460,000 business with 100 or fewer employees and the reaction from small businesses has been enthusiastic, says Tim McDonald, a Senior Vice President Small Business Banking Manager with Bank of America.
“All the businesses we go and see are very anxious to talk with us. They’re glad that the bank has people who are willing to come meet them in their place of business and get a better understanding of what their business is and how it runs.”
Although the bank’s outreach program focuses on business with 100 or fewer employees, McDonald says that most of the businesses he meets with have 20 employees or less, with revenues typically between $250,000 and $5 million. They’re store owners, manufacturers, service providers, “the full spectrum of what’s driving our nation’s economy.”
The financial needs of the businesses are varied, too. One of the businesses McDonald visited recently was a merchant with a chain of stores. The merchant thought the merchant account fees the stores were paying were too high, and he wanted to change merchant account providers.
Other businesses are looking for loans and lines of credit. “Due to the low interest rates, we’re seeing a lot of folks now who own the building that their business is in and want to refinance, as well as others who are looking to purchase a building,” Tim said.
Bank of America, which extended 6.4 billion in new originations to small businesses in 2011, is one of the leading small business lenders in the US. To qualify for a loan, a company has to have been in business for two years and have shown a profit, and must show that they are able to support the line or the loan that they’re looking to get. Startups, McDonald says, “may have to go to a credit card from the strength of the individual who owns the business until they get more established.”
In addition to loans, lines of credit, merchant accounts, credit cards and transactional accounts, Bank of America offers a full range of other financial products for small businesses including pension plans, and retirement accounts.
One of the focuses of the Bank of America outreach to small business, is to make it easier for them to establish a relationship with a banker. Although small business owners are often advised to of the importance of building a relationship with a bank, the advice frequently goes unheeded if for no other reason than lack of time. Business owners, McDonald says, “don’t want to take the time out of their busy day to go talk to the folks at the bank.”
To solve the problem, Bank of America small business bankers meet with business owners at the owner’s place of business. “We’ll come out to the small business on their terms when they would like to see us, when it’s convenient for them, off-hours, at seven in the morning, on Saturdays, or during business hours,” explains McDonald. “When you need the bank, you’ve got a person to call. You’ve got a person who can come out and visit you and can meet your needs. The folks that we’ve hired, on average, have 17-18 years of banking experience. So they have the experience, they have the know-how, they have the ability to work with folks to build that relationship and be there for them when they need them.”
Banking, McDonald adds, “Is all about relationships. If you’re comfortable with that relationship and you feel like you’re getting value from the relationship, you’re not going to be eager to switch. People don’t walk away from a good thing.”