A strong relationship with a bank can serve you at every stage of your business.
Early on, a financial partner can set up the accounts and services you need to get started. As you grow, a strong relationship at a bank makes you a more attractive borrower, helping you secure financing in the face of the funding gap that still affects many minority-owned businesses. And as your business thrives, the bank can help meet your more complex needs, or help you sell the business and make a plan to move into the next phase of your career.
Along the way, the right banking partner will offer trusted advice that helps you feel secure in your finances and confident in your business growth.
Finding the right partner, though, can feel intimidating, particularly if you don’t have a lot of experience working with banks. Read on to learn how to evaluate a potential banking partner as a minority business owner, so you can make the right decision for you.
Do they have a track record working with minority-owned businesses?
Minority business owners can face unique challenges. Minority-led households tend to have lower average household wealth and lower-than-average credit scores that make it harder to get a loan. The right banking partner should understand these challenges and help you work toward solutions.
As an entrepreneur, you’ll need good credit and strong personal finances to secure a business loan, since you’ll need to guarantee the loan personally. A banking partner can help you come up with a strategy to help you maintain (or achieve) a great credit score, so you can put together a strong application for a business loan. What’s more, the right bank can help you make the most of your income, freeing up funds you could opt to invest in your business.
A proven track record of helping minority business owners ensures that the bank can anticipate your needs and offer advice that’s tailored to you.
Does the bank have small business services you need?
Your banking needs will change as your business thrives, and the right partner should be able to meet your needs every step of the way.
Early on, you may simply need business checking accounts to make transactions, cover payroll and pay your suppliers. But finding a partner who offers other small business solutions, including business loans, lines of credit, credit cards and more, ensures your banking relationship can grow as your business does.
Pay particular attention to a partner’s payment solutions, or merchant services offerings. The bank should keep up with innovation and consumer trends when it comes to payment methods — so you can accept payments however, and wherever, you need to.
If you plan to expand outside the United States, or serve a global customer base, look for a partner with foreign exchange services to help you receive payments in multiple currencies.
Take the time to research what each potential banking partner can offer you. Ensure they can provide the services you need, so you aren’t shopping for a new bank in a year or two.
Do they offer personal banking services you need?
While you’re researching a potential bank’s business banking services, look into personal banking options, too.
Launching your own business can blur the lines between personal and business banking in some instances, since your personal credit or collateral can be used to guarantee a business loan. That means building a relationship with a financial partner through personal banking can help your business, too.
Are there educational materials and resources available to help your business grow?
Starting your own business means you’re a manager, marketer, salesperson, strategist and bookkeeper all at once. And while your years of industry experience mean you’ve got the know-how to succeed, you’ll still need support as you launch and grow your business.
Access to educational resources is especially crucial for minority business owners, since gaps in education and skill development can explain up to 30% of the gap in self-employment between Black, Indigenous, People of Color (BIPOC) entrepreneurs and nonminority business owners.
Look for a banking partner who will offer well-rounded education and support as you grow and run your business. From navigating times of uncertainty to building your exit strategy, the right bank should be there with suggestions you can trust.
Does the bank value diversity?
“Diversity” is not a buzzword, and the ideal banking partner shouldn’t just pay lip service to inclusion — it should be a core value in their business.
Look into a potential banking partner’s diversity and inclusion efforts, to learn what they’re doing to foster diversity within the bank and in the communities they serve.
Research shows diverse companies offer better customer service, more effective problem solving and greater innovation than less diverse competitors. Banks looking to attract a diverse customer base also offer services developed with multicultural communities in mind, like bilingual employees and resources available in multiple languages.
In other words, finding a partner that values diversity doesn’t just mean your values align with the bank’s, it means they’ll be able to offer exceptional service that helps your business grow.
PNC is here to help
Finding the right banking partner can feel intimidating, but talking it through with an expert can help. PNC’s Minority Business Development Officers are available and ready to help you work through challenges, finding solutions to meet your needs.
To learn more about our small business banking solutions, connect with a Minority Business Development Officer to learn more about how we can help you grow.