Starting a new business requires courage. Maintaining a successful business requires dedication. Running any business requires money. Whether you are a startup entrepreneur or a veteran CEO, as a business owner, one of the most critical decisions you can make is who you choose as your commercial lender. There is no one-size-fits-all solution, as different companies have different and evolving needs; however, there are qualities and services that preferred lenders share, such as trust, expertise, professionalism, and personalized service.
Defining what type of institution you want to work with is one of the first steps many take on the path to securing the right lender. Funding sources include but are not limited to large banks, small banks, online lenders, credit unions, and CDFIs (community development financial institutions). According to the Federal Reserve’s Small Business Credit Survey: Report on Employer Firms (Small Business Credit Survey), community banks are one of small business lenders’ top choices, for various reasons:
Small banks offer small businesses big support. Banks are the most common source small employer firms apply to for credit, with 47% seeking loans from small banks. Not surprising, as community banks have historically had the highest approval rate for small business loans.
Applicants face fewest challenges with small banks. Applicants had fewer challenges with small banks than other institutions in nearly every category surveyed including high interest rates, lack of transparency, and unfavorable repayment terms. 55% of applicants surveyed reported experiencing no challenges with small bank lenders, compared to big banks (41%) and online lenders (37%).
When exploring financing options to grow your business, trust is paramount. Take it upon yourself to do significant research, such as reading reviews and ratings from other customers to gauge the average borrowers’ opinion of working with a lender. This is a helpful, relatively easy exercise that gives you a sort of sneak preview of working with a lender through the lens of someone who may have been in a position similar to yours, helping make this process more relatable.
Trust Tip: Don’t be afraid to interview candidates and ask any questions you would like answers to. Establishing transparency early on is a great way to gain reassurance that your lender is aware of your priorities, allowing you to focus on building your business rather than tunnel-visioning on finances.
You know your business better than anyone else, and you should be confident that your commercial lender can say the same for themselves. As a small-business owner, wouldn’t you feel more confident putting your livelihood in the hands of a team with a substantial proven track record with other small businesses? Of course you would, it’s common sense. Even better if you can identify a funding source with expertise in your particular industry.
According to the Small Business Credit Survey, the industries that received the most funding from small banks were services and real estate (74%), non-manufacturing goods production and associated services (70%), and leisure and hospitality (66%). The industries that received the most funding from online lenders were healthcare and education (89%), business support and consumer services (83%), and retail (77%). No industry was reported as receiving a majority of funding from large banks.
Expertise goes hand-in-hand with professionalism. Expect your lending partner to complete applications quickly, request everything they need up front, and maintain an open line of communication. They should also keep you abreast of progress, not only to ensure that you feel educated and comfortable, but so you, in turn, can do your part to help ensure all processes are carried out smoothly and efficiently. Once you’ve been introduced to the loan that tailors to your needs, your lending agent should produce a plan and provide a clear understanding of the closing process, eliminating any confusion or uncertainties.
Any outside vendor worth partnering with will make every effort to build a strategic partnership with you, acting as an extension of your team rather than a separate entity. Taking a customer-focused approach to banking means making time for one-on-one interactions, understanding a customer’s specific needs, and providing them with the best solutions. These personal exchanges are the foundation of what will hopefully become a long-term partnership rather than just another investment.
Do Your Business with a Local Business
There are myriad reasons small businesses consistently seek out loans from community banks. Here’s one: because the staff know its community inside-out, they are tuned in to local needs. Personal experience and knowledge about the place your business exists is a huge advantage. Community banks want to help grow their community so helping you and your business thrive is their priority.
NVE Bank offers a variety of options for commercial loans with manageable terms and a loan process that is quick and easy:
Commercial Real Estate Loans. NVE provides commercial real estate loans for purchasing and refinancing a variety of commercial property types and uses. Fixed and Adjustable Rate Loans of up to $10 million are available for retail centers, office facilities, mixed use facilities, industrial facilities, and multi-family housing loans.
Multi-Family Housing Loans. NVE has a number of options available for purchasing and refinancing multi-family housing. We offer loans up to 75% loan to value, and will amortize that amount to a maximum term of 30 years on garden apartments, mid-rise buildings, and high-rise buildings.
Business Lines of Credit. NVE offers customers who are qualified businesses or professionals a short-term, pre-approved amount of credit. This provides the flexibility to draw as business needs arise. Certain terms and conditions may apply.
Business Term Loans. For those looking to expand their business, NVE offers Term Loans for a variety of uses including obtaining a term loan to purchase inventory and equipment, as well as to improve or expand facilities. Certain terms and conditions may apply.
NVE Express Credit. Ideal for small businesses, NVE’s Express Credit features an easy application process and accelerated approval times on a loan or line of credit up to $30,000. Restrictions apply. Inquire at our local branch for requirements.
For more information on any of our commercial lending products, or to receive a loan application, please contact an NVE Commercial Loan Officer at 201-816-2800, 1-866-NVE-BANK (1-866-683-2265) or e-mail Sam Tolley at firstname.lastname@example.org.