NFIB Survey Reveals Small Businesses Prefer Smaller Banks and Value Customer Service
The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, recently released a survey assessing small businesses’ relationships with banks. Conducted via email from April 14-18, 2023, the survey provides insights into small business banking operations and confidence in the banking system and the overall economy.
According to Holly Wade, Executive Director of NFIB’s Research Center, “Small business banking is a critical component of every small business.” She highlighted the importance of a robust, stable small business banking system in the wake of recent bank failures.
The survey found that 67% of small business owners use small or regional banks, while 17% use medium-sized banks (PNC, Fifth-Third, Bank of the West, KeyBank, HSBC, Schwab, etc.), and 14% use large banks (Chase, Citi, Bank of America, Wells Fargo, Capital One, U.S. Bank, etc.).
Customer service emerged as the most crucial factor for small business owners when choosing a bank for business purposes, with 87% considering it very important. Additionally, 62% of owners reported that low banking fees are crucial when selecting their business bank. Other important factors include a convenient location (66%), competitive interest rates (53%), and online banking capabilities (60%).
The survey also revealed that 74% of small businesses haven’t borrowed money for business purposes in the last three months. Of those who did, 34% were very satisfied with the amount and terms offered for the financing they received. The main reasons for seeking financing were to meet operating expenses (37%), expand the business (21%), and replace capital assets or make repairs (24%).
Regarding the health of their banks, 31% of small business owners were not at all concerned, while 19% were very concerned, 23% were moderately concerned, and 28% were slightly concerned.
The survey also found that 55% of small business owners use one bank for business purposes, 34% use two banks, and 11% use three or more banks. In terms of the current financial state of their businesses, 30% reported excellent, 44% reported good, and 22% reported okay. Only 4% characterized their business’s current financial state as bad.
The findings from the NFIB survey highlight the importance of strong relationships between small businesses and banks, with smaller banks being preferred by the majority. Small business owners should consider these factors when selecting a bank to ensure they receive the support and services necessary for their businesses to thrive.
This article, “NFIB Survey Reveals Small Businesses Prefer Smaller Banks and Value Customer Service” was first published on Small Business Trends