Charles Potts: Deepen small business relationships

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By Charles Potts, ICBA

Community banks are the lifeblood of small businesses, especially in the communities they serve. With the Coronavirus Aid, Relief, and Economic Security (CARES) Act, community banks played an outsize role in Paycheck Protection Program (PPP) lending, ensuring small businesses received the funds they needed to keep their businesses afloat. Now, with the pandemic entering its second year, it’s vital that community banks deepen and broaden their relationship with the small business marketplace. As we’ve often said, where there’s a healthy community bank, there’s a healthy community, and vice versa.

With that in mind, it’s important for community banks to reach into their communities to identify and address the needs of unserved or underserved small businesses. Gig workers, sole proprietors and small business entrepreneurs would benefit significantly from a strong, long-term partnership with a community bank.

Through fintech partnerships and the direct advancement of technologies, community banks can now extend services to small businesses beyond banking platforms and bill payment to include small business cash management and cash flow analysis. Services like payroll, receivables financing, and timely credit and lending opportunities can help small businesses sustain and grow their businesses in tough economic times.

By providing what we euphemistically refer to as straight-through or end-to-end processing, community banks can offer small businesses capabilities we find in the banking-as-a-service (BaaS) environment. For example, fitting the bank’s platform underneath the business’s technology suite can give small businesses access to tools that address customer authentication as well as know your customer (KYC), Bank Secrecy Act (BSA) and anti-money laundering (AML) requirements and underwriting.

Some of this is going to dovetail with the evolution we’re starting to see from an innovation and fintech perspective to create solutions for subsets of the small business marketplace. Community banks can now perfect their expertise around niche subsets like home improvement contractors or real estate professionals, for example.

As we move through this year and reflect on 2020’s experiences with the COVID-19 crisis and PPP funding, putting more solutions and services to use that strengthen the relationship between community banks and small businesses becomes even more critically important. Now is the time to leverage the high-tech, high-touch relationship that is unique to community banks.

Don’t miss your opportunity this year to broaden and deepen relationships with existing small business customers and to acquire new ones by offering them the tools and services they need to be more efficient and effective in these tough times.

It’s essential that community banks understand and leverage their position in the small business marketplace for the health of our communities, our country and the economy. With that said, many small businesses remain unaware of the tools and resources that community banks have available. So, it’s up to you to tell them. If not you, then who? And if not now, when?

Charles Potts ( is ICBA senior vice president and chief innovation officer