Last month, OMB Bank was thrilled to be among the Springfield Business Journal’s Dynamic Dozen honorees. As SBJ Executive Editor Christine Temple noted in her remarks, these 12 fast-growing businesses accounted for nearly $8 billion in revenue last year and employed approximately 19,500 local residents.
But every large business was once a small business, struggling to find their footing. That’s the point where relationships matter most, and despite the headlines regarding recent bank failures garnering national attention, no industry is better positioned to encourage economic development than community banks.
These financial institutions, generally considered to hold less than $10 billion in total assets, are deeply rooted in their local communities and possess unique qualities that make them vital engines for growth and prosperity.
By cultivating strong relationships with local businesses and individuals, community banks support small-scale ventures, promote entrepreneurship and contribute significantly to the overall economic vitality of the regions they serve.
Supporting small businesses
One of the primary strengths of community banks lies in their unwavering commitment to supporting small-scale ventures. Unlike their larger counterparts, community banks possess a deep understanding of the local market and have the flexibility to tailor their financial services to meet the specific needs of small businesses.
In fact, according to the Independent Community Bankers of America, community banks provide approximately 60% of all small-business loans and upwards of 80% of all agricultural loans, making them the lender of choice for many small businesses across the country.
By providing accessible loans, favorable interest rates and personalized financial advice, community banks empower aspiring business owners to transform their ideas into thriving enterprises.
Many community banks offer a comprehensive suite of services, including business development programs, mentoring and access to government-guaranteed loans through the Small Business Administration, which can help position these businesses for long-term success. By nurturing these enterprises, community banks generate employment opportunities, invigorate local economies, and cultivate a sense of pride and ownership among community members.
Fostering entrepreneurship and innovation
Community banks can serve as catalysts for entrepreneurship and innovation, vital drivers of local economic development. By providing capital and guidance to promising businesses and their projects, community banks encourage their growth and creativity, attracting talent and investment to the region.
Additionally, community banks have a deep understanding of the local economic landscape, enabling them to identify emerging industries and market niches. They can then channel their resources and expertise to support these sectors, fostering economic diversification and resilience. In doing so, community banks contribute to the region’s long-term sustainability and competitiveness.
Employing a personalized approach to banking, community banks are built on strong relationships with their customers. Many of them take the time to understand the unique circumstances their clients face, forging trust and loyalty that extends beyond routine transactions.
The close-knit relationships community banks develop with their customers also directly impact financial literacy and responsible financial management. By offering guidance, education and customized solutions, community banks empower customers and small businesses to make sound financial decisions, ultimately strengthening the economic fabric of the region.
A symbiotic relationship exists between community banks and regional economic development. These institutions, managed by banking experts who live here, too, possess the local knowledge, flexibility, and commitment necessary to propel growth and prosperity.
By supporting small-scale ventures, fostering innovation and nurturing strong relationships, community banks can play a vital role in creating and maintaining thriving local economies. As the Ozarks continues to evolve, recognizing and leveraging the unique strengths of community banks will remain central to fostering sustainable regional economic development.
Joey Orr is executive vice president and community bank president for OMB Bank. He can be reached at firstname.lastname@example.org.
Springfield Business Journal’s 2023 Trusted Advisers event honors 20 businesspeople.