In a new survey from the National Federation of Independent Business (NFIB), the relationship between small businesses and banks was assessed, offering insight into small-business banking operations and the confidence small businesses have in the banking system and the economy.
“Small business banking is a critical component of every small business,” NFIB’s Research Center Executive Director Holly Wade said. “Small-business owners rely on their banks to help manage cash flow, expand their business, and receive financial advice. The recent bank failures put into focus the importance of a strong, stable small-business banking system to the small-business economy.”
The survey found that two-thirds (67 percent) of small-business owners used a small or regional bank, 17 percent use a medium-sized bank, and 14 percent use a large bank.
A little over half (55 percent) of small-business owners use one bank for business purposes. Thirty-four percent use two banks and 11 percent use three or more banks for business purposes.
Of all services and functions offered by banks, customer service was overwhelmingly listed as the most important by small-business owners, with 87 percent reporting it was very important to them when choosing a bank for business purposes. Nearly two-thirds (62 percent) reported low banking fees as a very important factor in choosing the bank they currently use for their business needs. Sixty-six percent of owners said a convenient location was very important to them, andcompetitive interest rates were reported as very important for 53 percent.
Almost one-third (31 percent) of small-business owners reported they were not at all concerned about the health of the bank they use for business purposes. Nineteen percent were very concerned, 23 percent moderately concerned, and 28 percent slightly concerned.