The Benefits of Community Banks for Businesses


 If you’re a business owner, you understand the importance of your presence and services to your immediate community—so who better to understand your needs than a local community bank? Community banks offer several advantages for small businesses:

1. Relationship-Based Banking

You know better than anyone that your business is based on your relationships with your clients. In fact, you probably know most of them on a first-name basis. Just as you’re well known by your community, community banks factor in what they know about the character and qualifications of their clients when deciding to grant a loan. To them, you’re more than a credit score or financial asset. 

2. Decisions with the Community in Mind

With an intimate knowledge of the local economy, community banks factor in the needs of the community when deciding to grant a loan. While larger national banks might only play a numbers game, a community bank’s insight into local market conditions leads to more business loan approvals. In fact, community banks hold 36 percent of small business loans, which accounts for double their share of the banking industry's total loans.

3. Faster Decisions

Whether a significant piece of equipment is damaged or you need to finance a new addition to your property, a community bank provides faster decisions to keep your business thriving. That's because a community bank considers loans based on its own standards, unlike the large national banks that use a strict set of guidelines passed down from corporate headquarters.

4. Local Networking 

Whether you are a long-term or new business owner, you understand the value of networking with local suppliers, service providers, and clients. A community bank can be used as an asset for those connections as you grow your business.

5. Collaborative Lending

Although community banks may not have the lending capacity of larger national banks, community banks collaborate on the credit/lending process to offer loans to more businesses, which allows them to serve more members of their communities. 


While megabanks attempt to appeal to consumers through national advertising and more branch locations, community banks are the smarter banking choice for personal accounts. Here are five benefits of community banks for individuals:

1. Personalized Attention

Employees of community banks pride themselves on the value they put on their clients as individuals. Many of them know their clients on a first-name basis and consider them neighbors. Because these relationships are important to them, employees of community banks tend to have a higher quality of service and flexible decision-making. Community banks thus have lower turnover rates than the megabanks.

2. Full List of Services

Community banks offer a full line of services and products, including online and mobile banking, and unique programs tailored to the needs of the local client base. With their personalized approach to loan offerings, community banks consider the individual they are serving rather than seeing them as a credit score plugged into an application. 

3. Lower Fees

Community banks charge fewer fees and offer more free accounts. Many do not have a monthly maintenance fee and keep overdraft fees to a minimum. On the other hand, megabanks continue to increase their overdraft fees: According to an article from Politico, JP Morgan Chase made over $2 billion in 2019 from overdraft fees alone. 

4. Higher Ethical Standards

Community banks conduct business at a higher standard of ethics because they themselves are members of the community. Understanding that their behavior and practices directly affect their community, their assets are invested in small, local businesses rather than national or international industries, which is common among megabanks. 

5. Stability 

It’s not news to many people that megabanks have been tied up in legal scandals. Much of the time, their recovery is at the expense of the client. With roots deep in their communities, community banks on the other hand dedicate themselves to their clients instead of maximizing endless profit. In fact, many have remained in their communities for generations.


Since our first location opened its doors in 2005, Excel Bank (a tradename of EH National Bank) has provided financial services to residents and small businesses throughout Southern California. While we've expanded, we're here to stay. 

For your small business or personal financial needs, contact us today. 

Important disclosure: The information provided in this material is intended for educational and informational purposes and is not intended to provide specific advice or recommendations for any business or individual. Certain products and services mentioned in this article may or may not be available from Excel Bank. All loans are subject to credit approval and customary due diligence by Excel Bank.