Bank Services Evolve for Small Businesses

Small businesses are always looking for an edge.
Whether it’s a way to shave operating expenses or elevate the company’s offerings, banks play an important role in helping businesses.
Kyle Gilliam, president of Arvest Bank’s Equipment Leasing Division, offers leasing on everything from fire trucks to IT equipment.
This alternative to traditional leasing offers potential clients 100 percent financing, preserving working capital or providing tax benefits to customers. The leasing deals can be structured so the customer only has to manage a monthly fee while the bank owns the asset. Or, the arrangement can be so that the customer retains ownership, with the bank acting as the lien holder, and be able to take depreciation and expense the interest if desired.
Arvest will target deals $10,000 and above, and will also compete with the larger banks for multi-million dollar deals, but Gilliam said “our bread-and-butter type of deals … are probably going to be in the $75,000 to $250,000 range.”
The bank won’t rush to peddle lots of these leasing deals. Gilliam anticipates volume starting around 10 to 12 applicants per day, and working up to 30 applicants. He said a good goal would be 150 to 200 new customers by year’s end and $20 million to $25 million outstanding.
Nat Bothwell, director of marketing for ANB Financial NA of Bentonville, said the bank has tried to attract business customers by charging less. Beginning this year, ANB eliminated 12 different service fees, including fees on wire transfers and Automated Clearing House services.
Technology is a driving force behind many of ANB’s services. One such service is the Select Connect system for remote capture. As long as a business has a computer and an Internet connection, the bank can provide the software and scanner. A business owner can just sit down at a desk and scan a check, instantly depositing the money.
The benefits include less float time, getting the credit faster and saving time by not going to the bank.
Debra Jackson, ANB president, said about 45 customers are using Select Connect. She said there’s no ideal customer — that it can be used by nearly any small business or even larger companies.
Another way of eliminating time traveling to a bank is courier services, said Knight Weis, president of Signature Bank of Arkansas’ Springdale branch. Couriers, or even armored vehicles, can be scheduled to pick up and drop off transactions to businesses.
Weis also said sweep accounts are good ways to satisfy business customers.
He said many small businesses have debt despite having good cash flow. With these types of situations, Signature can turn that debt into a line of credit with its treasury services.
“The business is basically their own banker at that point,” Weiss said.
What happens is the bank sweeps all excess deposits at the end of the day as a principal payment on that line. Over time, that will effectively pay off all the debt, and then the business can grow its cash account.
Weis admitted that anyone can do this manually, but said his experience is that nine out of 10 businesses pay off their debt in two to three years.
He said many owners ask why the bank offers the service because it equates to less interest paid to the bank. It’s actually an effective business tool but it also entrenches the business into their system, making them less likely to take their business to another bank. And, when their debt has been repaid, elated customers can generate a lot of referral business.