Choosing a Lender

Once you have put together a loan proposal for your small business loan, it’s time to select prospective lenders. Many customers turn to the bank with which they already have a relationship. However, the needs of your small business should come first, and you should make several considerations before choosing a bank to approach:

• Is the bank sincerely interested in your business?
• Will the bank provide you with the services you need?
• Can you develop a good long-term relationship with this banker?

Key questions to ask bankers include:

• Do they support an industry specialty related to yours?
• What is the average size of their small business loan borrowers?
• What are their professional backgrounds? Are they commercial or consumer lenders?
• Does the bank have the level of lending authority you need?

Size Matters

The size of your lender—that is, will it be a large commercial bank or a small community bank?—depends on the needs of your small business. Large commercial banks tend to offer a wider range of services and locations, but will also have more customers and be less able to give you a “personal” touch. Community banks are smaller, so the banker you deal with might be able to make your financing decision personally or speed up the decision process. However, community banks typically have less services and locations.