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Picking a bank: Study perks, fees but trust is paramount

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You need to be a in a relationship – there’s no doubt about it.

You need guidance, someone to keep your feet grounded while simultaneously encouraging your dreams.

You, the entrepreneur, need someone to count on.

And that someone is a banking institution that can meet the needs of a small-business owner with one eye on survival and the other focused on a thriving future.

Resources at local Chambers of Commerce can help steer entrepreneurs toward the tools to finding a quality banking entity compatible not just with a businessperson’s needs and goals, but also his or her personality.

“It’s about relationship building, relationship building, relationship building,” said Tara King, executive director of the Upper Bucks Chamber of Commerce.

King’s contention is shared by Jobany Bedoya, small business and Latino outreach coordinator for the Greater Reading Chamber Alliance, and Barry Diehl, the immediate past chair of the Lehigh Valley Chamber Small Business Council and a principal with Your Neighborhood Dry Cleaner in downtown Allentown.

King estimates 97 percent of her chamber’s 600-plus members fall in the small-business category. Many of those members’ businesses are centered on the area’s thriving hospitality and tourism industry.

King said her accessibility and that of her staff are assets for someone interested in starting a small business.

“We’re happy to talk with them and point out resources like Bucks County SCORE, the Lehigh [University] Small Business Development Center and the Rising Tide Community Loan Fund,” she said.

REFERRALS FROM CUSTOMERS

The steps of contact include initial conversation, development and presentation of a business plan and, ultimately, determining financial/capital needs. For example, the SBDC can help with data needs, such as demographics, that are components to a successful business.

“There’s a lot of education involved the first time out,” King said. “Often, a person will say: ‘Can I get a grant?’ The reality is they need a plan, some collateral, and take that to a bank that they can ‘sell’ it to.”

King, who has been with the chamber for 18 years, is nearing retirement and eyeing the possibility of starting a small business when she relocates to a new state. She said word-of-mouth is often the best recommendation of a financial institution.

“Experience is king,” she said. “I think when people are talking about their experience, that’s what drives someone else to consider a bank.”

HUNGRY FOR BUSINESS

Bedoya agreed about the value of an experienced banker.

The Berks chamber’s go-to guy for small business has logged many years in banking, working his way from teller to manager. He was tapped for this new chamber position last August.

“When a new client or business person comes to us, we suggest they shop around for banks,” he said. “As a former banker, I know institutions are hungry and are trying to win more business.”

SCRUTINIZE PERKS, FEES

Bedoya, whose position is funded by financial institutions, does not recommend any specific ones. His advice includes examining business perks as well as fees, which differ from place to place.

He also advises clients to take the term “community bank” somewhat loosely.

“Check out local banks and compare them to the big banks,” Bedoya said. “There can be advantages at either.

“When you’re scraping by and just starting out, you’ve got to try and save money, especially when it comes to fees.”

ALL ABOUT TRUST

Bedoya also says that personally knowing a banker is critical for his Latino clients.

“For Latinos, the relationship is No. 1,” he said. “The mantra pretty much is: ‘If I don’t trust you, I won’t do business with you.’

“In our culture, we want to know about the whole person – their family, friends, everything,” he said. “As soon as you win one, you often get the whole family, the community.”

RESPECT

Being treated with dignity leads to a trust-based relationship, Bedoya said.

“The most successful banking sales people recognize we [Latinos] have the largest purchasing power and will soon become the majority [population].”

Since joining the GRCA, Bedoya has worked directly with 45 Latino-owned businesses, 38 in Reading. Of the 45 businesses, 29 are woman-owned.

“It’s amazing to see the progress being made,” he said.

CONTINUITY

Diehl uses his experience working with banks as the standard to advise others.

Small-business folks like him seek continuity in a banking relationship. He noted that while the merging of institutions into ever-larger banks continues to trend, the personal relationship can endure if specific individuals remain in place.

Diehl said his interaction with his accountant was critical in helping select the proper bank.

“Partnering with an accountant was a great thing,” he said. “What I didn’t know, he was so better able to sort out in a nonbiased way.”

IN EFFECT SEEKING A BUSINESS PARTNER

When Diehl and his wife picked a site in downtown Allentown last year, they also switched banks.

“We needed a loan, as there were fairly sizable costs involved,” he said. “We were, in a sense, looking for a business partner.”

They considered three institutions, reviewing the commercial banking policies and perks of each, including amenities that would enhance the time effectiveness so important in a mom-and-pop operation.

“When you have a relationship that works, when you’re happy with your bank, it’s seamless and it’s one less thing you have to worry about,” he said.

NETWORKING FOR ADVICE

In his chamber role, having walked the walk enables Diehl to understand what others face. The establishment of small mixed-profession networking groups, such as the chamber’s master minds, facilitates conversation and problem-solving. Banking and business financing are among frequent topics.

When he lived in another state, Diehl also was involved in a chamber and saw the advantages for new entrepreneurs.

“I knew there were opportunities to meet and greet and get our business name out there,” he said. “We’re always trying to look at how we can help small-business owners.”

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