So you are considering a small business loan but are concerned about the terms. You have a vision for your business, a set of goals to accomplish, and an understanding of how and why you fit into the growth of Chattanooga. The only problem is, a Big Bank has decided to put you in a box and keep you there. With inflexible policies, Big Banks can be a challenge for local business owners looking to begin or expand. Fortunately for you, RockPointBank is focused on local businesses, but you don’t have to just take our word for it, you can take the FDIC’s too.
Local Banks Continue To Have a Flexible Advantage
In the recently released 2024 FDIC Small Business Lending Survey, the FDIC found that while Big Banks claim to be relationship-oriented, their small business lending practices are typically based on hard information. On the other hand, local banks continue to offer more options for small businesses based on soft information, which includes their relationship not only to the individual seeking a loan, but to the local market itself. This relationship to the local market, often missing from the consideration of Big Banks, is a crucial component for small business success. It is important to note that the FDIC considers a “small business loan” to be any loan up to $1 million.
The Difference Between Hard and Soft Information
Hard information is generally defined as information that is quantifiable. It is typically financial in nature and can include debt service coverage ratios and loan-to-values. Generally, it is standardized and reduced to numbers on a page.
Soft information, on the other hand, is ascertained through relationship-building. This information includes community reputation, management skills, and business plans. Generally, this type of information is gathered through direct relationships with a banker and their client.
Relationship-Building is an Asset for All of Us
Through the digital age, we have seen the rise of Big Banks using technology as the sole approach to making decisions about people and their businesses. At RockPointBank, we believe that decisions made about people should be made by people. We were founded on the principle that smart banking is people-focused and that our flexible positioning makes us an asset to small business owners seeking to contribute to their local economy. With the 2024 FDIC Small Business Lending Survey, we get hard data that soft information continues to be an important asset for building local economies.
Do not believe that all banks operate in the same way. You have options. Through careful planning, expertise at your disposal, and a people-focused approach, RockPointBank is here to partner with you in your small business success.
Are you ready to take the next step forward?