What Does A Community Bank Do?
You’ve experienced regular banking before. It all about long lines, impersonal service, and the people who only see you as a consumer and a credit score. Banking doesn’t have to be this way. Community bank owners have known this for generations, and customers are starting to catch on once again. People are beginning to understand they have a choice when it comes to banking, and they’re quickly returning to the community banks that have always provided the best service. When you want something better from your financial institution, consider using a local bank.
What Is a Community Bank?
What exactly is a community bank? You’ll get different definitions depending on the source you use. Some institutions assign numbers and dollar amounts to separate community banks from the major banks. If a bank handles less than a certain amount of money, then that bank counts as a community bank. However, people can’t seem to agree on the precise dollar amount that sets community banks apart. A more general definition says that a community bank is simply a bank that serves a particular community. If a bank only exists in your city and doesn’t have a lot of branches, then it’s a community bank.
Community Banks vs. Big Banks
Why do people choose community banks over big banks? What can community banks offer that big banks can’t? Aside from the different sizes, the biggest difference comes from the owners and employees. Those who own and work in community banks often live in the same area they serve through banking. They’re uniquely equipped to handle the community’s financial needs because they know what those financial needs are and how to meet them. They’ve often experienced those needs personally and, as a result, they come up with solutions that work. They don’t use a one-size-fits-all approach but rather tailor their services to mesh with the community’s specific needs.
How Do Community Banks Compare to Credit Unions?
When people research community banks, they often stumble across credit union information, too. Credit unions and community banks are quite similar to one another. Both offer products and services based on their clients’ needs. Both cover a full range of financial options such as loans, checking accounts, and savings accounts. However, there is one big difference between community banks and credit unions: ownership. Like bigger banks, community banks are businesses. They’re owned by one person or a few people. The people who use their services are customers. Credit unions are nonprofit organizations. They’re owned by the people who use them. Those who use their services are called members. Both credit unions and community banks make a great choice when you’re tired of big, impersonal banks. A bit of research and comparison will help you decide which choice is right for you.
Community Bank Benefits
You already know that community banks can make a much better choice than national banks, but what are some of the specific benefits of community banking? The locality and smaller size of community banks let them provide a lot of perks for their customers. You’ll find just a few of those perks listed below.
Local Economy Boost
It’s important to support your local economy. Local businesses often invest their money back into the community, making sure they meet peoples’ needs. By supporting your local economy, you help people build good lives for themselves and their children. You make sure your community receives excellent financial products and services, and overall, you help your community thrive. What does all of this have to do with community banking? When you use a community bank for your financial service needs, you help your local economy in a big way. First, your community bank is itself a local business. It provides jobs to community residents. When you do business with this kind of bank, you help keep your friends and neighbors employed. Second, community banks support the local economy through loans, checking accounts, and other products. As a matter of fact, many small-business owners turn to community banks after getting turned down by a larger bank. Community bankers generally understand the importance of local business, and they’re willing to take risks on businesses that can help make the community a better place.
Credit and Loans
As we said above, community banks will often provide loans when bigger banks will not. At national banks, getting a loan can be a challenging endeavor. Without a near-perfect credit score or plenty of collateral, many people struggle to get the financial services they need. That’s because big bankers don’t always understand how your local economy works. Community bankers explore factors other than credit scores. They know all about the local economy and which businesses can benefit your community the most. They also know about the challenges your economy faces, and they’ll keep these challenges in mind when approving loan requests. As a result, community bank loans are often far easier to obtain. Furthermore, community banks generally offer better interest rates and payment plans than national banks can offer.
Those who are starting a business may find it easier to pursue a community bank loan than a megabank loan. Why? Megabanks are wary of providing loans for “risky” business endeavors. Those who want to go into the restaurant business, hospitality business, or any other business that involves serving people may struggle to get a loan from a big bank. Furthermore, since women are statistically more likely than men to pursue these endeavors, women are less likely to get a business loan than men. These big banks won’t see your whole story. They won’t understand why your community needs your type of business.
Community banks, on the other hand, will recognize the value of your business. They’ll see how your business may work within your community. Community banks also often make loan decisions much faster than national banks make their decisions. The employees at megabanks wade through tons of applications every day. Then, each application goes through a standardized process. Meanwhile, people grow more and more anxious while they wait to see whether their loan applications have been approved. Community banks, by nature, have fewer clients and deal with fewer loan applications. Furthermore, many of them will speed up the process if they realize that you have extenuating circumstances. Sometimes, you just can’t afford to wait for a loan. That’s why if you’re looking for a loan, you should absolutely consider applying with a community bank.
As a matter of fact, community banks usually offer lower costs on all their products. Clients don’t often encounter hidden fees. Products such as checking accounts are usually free. At national banks, on the other hand, it’s getting harder and harder to find things like free checking. Big banks are big businesses. Their main concern is making as much money off you as possible. Community banks, on the other hand, want to serve their clients in the best possible ways.
Community bankers are surprisingly adept in the latest banking technology. That’s partly because they can offer more flexibility than big banks can. Due to their large size, megabanks get mired in process and existing technology. It’s tough for them to make any major changes without inconveniencing all their clients. With their smaller numbers, community banks have an easier time using the latest technology. The clients of community banks often get to take advantage of emerging banking technology long before the clients of megabanks do.
Better Customer Service
Nobody wants to feel like a number. Unfortunately, you may feel like just a number when you use a national bank. Big banks deal with so many people that it’s tough to provide the customer service that you deserve. It’s different from community banks. At a community bank, you’re much more likely to find someone who knows your name and wants to give you the best service. They’ll get to know you and your needs so that you always get the best from your financial institution.
A Personal Touch
Of course, using a community bank always feels more personal than using a national bank. National banks often feel sterile and overly standardized. At a community bank, you’ll get a personal approach to your financial needs. You’re more likely to receive customized services when you walk into a community bank. For that matter, you’ll feel more at home from the moment you walk into the building.
Convenience and Banking In Person
What could be more convenient than having a bank right there where you need it the most? Community banks provide that convenience. National banks can’t. For those who prefer banking in person, community banks often make the best choice. They’re easy to access when you need them, and their small size means you won’t have to deal with long lines and red tape.
Serving the Community
Finally, community banks serve the areas where they do business. National banks simply don't provide the same level of care. Like we said above, community bank owners and employees usually live in the area where they do business, and that makes them uniquely attuned to all the ways in which their business can help their community.
Earlier, we mentioned that it’s important to support local businesses in general. One of the reasons why local businesses are so important is they often contribute to local nonprofit organizations. Community banks are uniquely equipped to support these charities. When you use a local bank, you indirectly support the organizations that have such a big impact on your community as a whole. Community banks serve the community in other ways, too. For instance, community banks are far more likely than national banks to host things like free financial literacy classes, college savings classes, and similar resources. Again, they know what their community needs from their financial institutions, so they tailor their offerings accordingly. If your community has a lot of people with student loan debt, for instance, your local bank may host a seminar on how to best manage that debt. Local banks also support other local endeavors. They’ll sponsor local sports teams, for example, or participate in local events. For those who want a thriving community, local banking can have a big impact.
Community Bank Resources
“But what about banking resources?” some people ask. “What about ATM access, online banking, and all of those other things that I get from my national bank?” Those are good questions and valid concerns. In the past, community banks may not have had the same resources as national banks had. However, things have changed. Community banks now have access to those important resources. As a matter of fact, people are often surprised by the number of products and services that small banks have available. Thanks to relatively recent technology, you can get the same easy ATM access, online banking options, and other conveniences that you already get from your national bank. On top of those resources, you get all the things that only a community bank can provide.
How to Find Your Community Bank
Now that you know all about the importance of community banking, how do you find the community bank that works best for you? If you live in a big community with more than one local bank, making the right choice can be difficult. Furthermore, when you have different banking needs, you’ll want to find the option that can fit those needs best. For example, if you just need a checking account, you’ll probably consider different factors than if you were looking for a business loan. With all those things in mind, what’s the easiest way to make the right choice? The answer is simple: you can find your community bank with Bundlefi. Bundlefi lets you compare community banks and credit unions for free so that you can make the perfect choice for your banking needs. Bundlefi’s comparison tool is simple and user-friendly. Want to get started? Visit Bundlefi now to find your bank.