Why are Community Banks Better for Commercial Lending than FinTech Lenders?

In an evolving and fluctuating financial landscape, community banks offer clear advantages for small- to medium-sized businesses in Maine and New Hampshire that are looking for commercial lending and a comprehensive array of services and relationships. First, let’s start with some quick definitions.

Community banks are firmly entrenched in their local communities and offer a successfully proven combination of personalized service, digital tools, a deep knowledge of Maine and New Hampshire business matters, and investments in nonprofits and other organizations making the areas better places to work and live. A FinTech or financial technology company uses software, algorithms, and digital platforms to provide financial services, including commercial lending. They offer almost solely online products with no in-person services. In short, if you don’t want to be treated like a number, don’t get your commercial loan through a FinTech.

Advantages of a Community Bank for Commercial Lending

Actual Humans

Service and delivery is more responsive at community banks like Norway Savings Bank as decisions are made locally with the opportunity for in-person and/or online processing and communication with an actual human. Community banks provide access to financial experts for advice on mortgages, loans, investing, fraud prevention, cash management, and account services, with a variety of products to meet diverse needs while FinTechs rely heavily on self-service functions.

Personal, Long-Term Relationships

At a local bank, your lender gets to know you, your priorities, and your goals. Lenders build genuine, face-to-face relationships to ensure your needs are met and are able to offer empathy and assistance when unexpected situations or challenges arise. These relationships also enable a willingness to come up with customized options and tailored solutions that can work for you. This can create loan structures that align with your cash flow, growth trajectory, and investment plans.

Deep Understanding of Maine and New Hampshire

Community banks possess localized knowledge and connections in towns and cities throughout southern and western Maine and New Hampshire and have a wide-range of experience in local commercial banking. This includes an understanding of the challenges and opportunities faced by businesses. They even offer educational programs, articles, and workshops to prepare customers for financial issues and conditions.

Local Risk Assessment

A local presence enables community banks like NSB to examine client-specific details and nuances in its risk assessments and evaluation of loan opportunities. This is particularly appealing to newer businesses or organizations without an extended credit history.

Safety

Local banks are as secure as national banks and regulated under stringent guidelines that ensure customer deposits and interests are protected. At Norway Savings, the security of our customers’ money and account information has been our highest priority since the bank’s inception in 1866. NSB and many local banks utilize a defense-in-depth approach to guarantee the confidentiality, integrity, and availability of information systems and are vigilant about protecting customers from identity theft.

Community Investment in Maine and New Hampshire

Banks like NSB are committed to giving back to nonprofits and organizations doing great things in Maine and New Hampshire, investing in the residents of the areas it serves and helping local economies thrive through donations, sponsorships, and volunteerism.

Why Community Banks Make More Sense than FinTech in Maine and New Hampshire

Engagement

FinTech companies do not feature the human connection that is at the core of community banks like NSB. Interactions are primarily digital with no face-to-face interaction or conversations that build crucial familiarity, respect, and trust. There are also inherent complications in disputes which are more smoothly and quickly handled by local banks.

Peace of Mind

FinTech services come with well-publicized security and data privacy concerns as the companies might not be subject to the same consumer protection regulations as community banks, which emphasize protecting customer information and offer secure, advanced banking environments. The security measures, confidentiality, and privacy policies in place at community banks may not be utilized at FinTechs.

Deposit Insurance

Founded in 1866, Norway Savings Bank is an FDIC-insured depository institute. Funds stored in a FinTech may be unprotected, and transferring balances to insured banks and credit unions is strongly recommended by national and international organizations, including the Consumer Financial Protection Bureau.

Community Involvement

FinTech platforms operate on a global level and are not invested in local economies like community banks as described above.

Credit

Many FinTech programs do not report payments to credit agencies, which costs customers and clients the opportunity to build credit as part of regular transactions.

Technology

Community banks like NSB have quick, easy digital solutions to assist businesses, including NSB Business Online, NSB Business Mobile, and others.

Putting It All Together

When you use a community bank for commercial lending, you’re signing up to receive the best level of personal service and encouraging vibrant communities in the process. Unlike FinTechs, local banks reinvest in the businesses around them. That means more funding for local entrepreneurs and a stronger economy in Maine, New Hampshire, and beyond. By getting involved with a community bank, you’re tapping into a support system that genuinely wants you to succeed. In addition, in prioritizing personal relationships, community banks strive to understand your unique needs and deliver tailored solutions. This relationship-centric approach fosters shared trust and reliability and supports your business’ long-term financial success in the process.

Norway Savings Bank has the privilege of working alongside business owners from start-ups to national expansions. We’re right there with you to listen, strategize, celebrate, and advocate. Our lenders have a broad range of experiences and can offer valuable insight and recommendations as you embark on a new path to build or expand your business. If it’s important to you, then it’s important to us. Check out NSB’s Business Banking or let’s talk. You can also visit NSB’s Business Loans Resources Hub for helpful articles that can help you in your process.

***This article was written by commercial lending experts at NSB, not created by artificial intelligence.***