When Roy Williams Sr. needed a loan to start New Orleans Depot
Services in September 1996, he turned to New Orleans-based Whitney
National Bank. After all, Whitney had served him well during the 20
years he'd banked there as owner of AAA Tire Finishing, a tire
finishing equipment and supply company. When he decided to start a
second business with his son Kirk, Williams knew his loan officer
at Whitney would work with them to make it happen. And he was
right. Just a few days after applying, the partners got an
equipment loan and a line of credit for their shipping-container
service and repair company.
Good relationships have always been important in banking, but
these days, the relationship between banks and small business is
rapidly expanding as more banks offer cash management programs,
streamlined loans and convenience services to their small-business
clientele. At Whitney National Bank, for example, Williams and
other small-business customers can do more than obtain loans and
lines of credit; they can also take advantage of a host of services
under the bank's new Business Edge Banking program, which was
launched in May 1996.
According to Whitney's vice president Rebecca Dey, Business
Edge Banking was the direct result of input from small-business
customers. Whitney defines a small business as one with fewer than
20 employees and no more than $5 million in annual sales, says
Dey.
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"We found there was a real need for a business checking
account that is as easy [to use] as a personal checking
account," Dey says. As part of Business Edge Banking, Whitney
created a no-fee checking account for companies that write fewer
than 150 checks a month and maintain either a $2,500 minimum
balance or a $5,000 average collected balance each month. A
consolidated monthly statement puts all account and loan activity
in one report, simplifying cash management; customers can even
receive a daily fax of the previous day's banking activity.
Whitney's Business Owner's ATM card provides 24-hour
account access. "I know what small businesses' hours
are," Dey says. "They're doing banking at 9 p.m. and
on weekends."
Whitney National Bank is just one of a growing number of banks
targeting small companies with tailored financial management
programs. Although there aren't any statistics on exactly how
many banks offer such programs, industry observers say the
small-business market is garnering attention as other bank revenue
streams subside.
Ann Grochala, director of bank operations at the Independent
Bankers Association of America (IBAA), a trade group to which
nearly 5,500 community banks belong, says that banks are seeing
increased competition from nonbank financial institutions. Sources
such as Merrill Lynch, American Express, Money Store and even
insurance companies are helping small businesses finance equipment
and inventory. She adds that one way for banks to compete is to
offer other products, such as cash management and electronic
banking.
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