Some Things You Should Know About Community Banks

• Community banks focus attention on the needs of local families, businesses and farmers. Conversely, many of the nation's megabanks are structured to place a priority on serving large corporations.



• Unlike many larger banks that may take deposits in one state and lend in others, community banks channel most of their loans to the neighborhoods where their depositors live and work, helping to keep local communities vibrant and growing. 



• Community bank officers are generally accessible to their customers on-site. CEOs at megabanks are often headquartered in office suites, away from daily customer dealings.



• Community bank officers are typically deeply involved in local community affairs, while large-bank officers are likely to be detached physically and emotionally from the communities where their branches are located.  



• Many community banks are willing to consider character, family history and discretionary spending in making loans. Megabanks, on the other hand, often apply impersonal qualification criteria, such as credit scoring, to all loan decisions without regard to individual circumstances.



• Community banks offer nimble decision-making on business loans because decisions are made locally. Megabanks must often convene loan-approval committees in another state.



• Because community banks are themselves small businesses, they understand the needs of small-business owners. Their core concern is lending to small businesses and farms. The core concern of the mega banks is corporate America.

A Great State For Business

The national brokerage network NAI West has just come out with a midyear report for 2012, evaluating the commercial market, real estate market, and others, across the state. We highlighted before that Utah is the number one place in the country to do business right now, but now multiple sources confirm that if you want your business to do well, you’ll move it to Utah.

In addition to Forbes’ number one ranking for Utah, CNBC also said Utah was the second best state in the nation for doing business. Again, we highlighted that Provo was at the top of Forbes Best Cities for Business, but in addition to Provo, Ogden was also highlighted as the sixth best city in the nation for business. Overall, Salt Lake City was in the 15 Hottest American Cities of the Future list, in the Business Insider magazine.

And the good numbers and good news just keep on coming, from NAI West. Utah is in the top third of the nation for the lowest unemployment rates. Currently, the unemployment rate for the state is six percent. Last summer it was 7.3 percent. The national average at the moment is 8.2 percent. Naturally this is a great spot to do business, and to expand your current Utah business.

In addition to being a tech-friendly state in general, Utah’s office space is also a notable revenue stream across multiple counties. Of course this can be easily linked to the rise in tech-related businesses throughout the state that require space for employees and meetings. Recognizable names that have started constructing their own office space throughout the state include: Adobe, eBay, and Savage Industries. The current percentage of vacant office spaces is 13.98 percent, which is the lowest it’s been since 2007. Additionally, the total number of square footage bought for owner-occupied buildings doubled during the last half of 2011.

LOCAL BUSINESSES RETURN MORE TO THE SALT LAKE CITY ECONOMY THAN CHAIN RETAILERS

Local First Utah has released a new research study by Civic Economics detailing the amount of revenue returned to the local community by locally owned, independent businesses. The analysis shows locally owned retailers return 52 percent of their revenues to the local economy.  read entire press release at http://dev.utahbusiness.com/articles/view/local_businesses_return_more_to_the_salt_lake_city 

For comparison purposes, national chain retailers return just 14 percent of revenues. That means every dollar spent at a locally owned, independent business returns almost four times more to the local economy than a dollar spent at a national chain retailer.

The study also looked at restaurants, where Salt Lake City eateries returned 79 percent of revenues to the local economy. National chain restaurants return just 30 percent, meaning a dollar spent enjoying a meal at a local restaurant means more than two and one half times as much to the local economy than a meal at a chain restaurant.

The study concluded that shifting just 10 percent of purchases from national chains to local retailers and restaurants would keep $487 million in the Utah economy - money that currently leaves the state to be spent elsewhere. 

“Most of us have a natural sense that local businesses are good for communities,” said Betsy Burton, co-chair of the Local First Utah Board and owner of the Kings English Bookstore. “And studies in other parts of the country have borne this out over the past decade. Now we have hard evidence right here in our own city that consumers can have a huge impact on the local economy, just by shifting some of their purchases to local businesses.”

The Civic Economics analysis looked at detailed financial reports from 15 retailers and seven restaurateurs from Salt Lake City's neighborhood business districts. Similar studies have been conducted in Austin, Chicago, San Francisco, Phoenix, Grand Rapids, and New Orleans.  

“Every study we've conducted around the country has shown that shopping locally can keep at least three times more revenue in the local economy,” said Daniel Houston, partner at Civic Economics. “Salt Lake City is no exception. If anything, the 'local effect' may be even stronger in Utah.”

The first of its kind in the Intermountain West, the study came about as a result of the 2011 Neighborhood Business Conference. The analysis was paid for by Salt Lake City government and Local First Utah, with a matching grant from the American Booksellers Association. The on-going support of Zions Bank and Harmons also made the study possible.

“This study confirms what we've known for some time - that our residents have the ability to make a real difference with their purchasing decisions,” said Mayor Becker.  “Our local businesses not only help define the character of our community, but embody the source of a real economic stimulus that can have an immediate, positive impact on our City's economy.”

To download a PDF of the study results, visit www.LocalFirst.org/impactstudy.pdf.

Supporting Local Small Business Keeps Money In Your Pocket!

Business Owners Turn to Bank Loans, Not Business Cards, for Financing

Small-business owners seeking funding now see bank loans as their first option, not business credit cards, says a June 2012 Pepperdine University study, reversing the findings of the same survey in 2011, when credit cards were seen as the business owners' first choice for loans.

According to the survey, which included responses from 6,000 business owners,  68% of those seeking financing in the next six months said they will pursue a bank loan. Business credit cards were the choice of 40% and 36% said they will look to a credit union or community development fund for a loan.

The study, conducted as part of Pepperdine University's Private Capital Access Index study, also found that of the respondents who were unable to obtain a bank loan, 67% said they thought the bank loan financing was still a good fit for them.

Owners of lower revenue businesses (less than $5 million) were found to be less optimistic about receiving financing from banks than owners of businesses bringing in between $5 million and $100 million.

The preference for bank loans reverses the sentiment business owners expressed in  the same study in December 2011, when only 37% of respondents said they had tried to receive bank loans in the past 12 months. The survey then found 49% of respondents sought to use credit cards.

http://www.foxbusiness.com/personal-finance/2012/07/03/business-owners-turn-to-bank-loans-not-business-cards-for-financing/#ixzz20zPDXQua

Small Banks Approving More Small-Business Loans

Small banks beat out their larger counterparts last month with a bigger jump in approvals for loans to small businesses, according to the Biz2Credit Small Business Lending Index.

A monthly analysis of 1,000 loan applications on Biz2credit.com found that loan approvals in June by banks with less than $10 billion of assets totaled 47.5%, up two percentage points from May and five percentage points from a year earlier.

Approvals by banks with at least $10 billion of assets, rose half a percentage point from May, to 11.1%, Biz2Credit said Tuesday. This also was significantly higher than the 8.9% approval rate recorded in June 2011.

"Small banks are the big story this month," Rohit Arora, Biz2Credit's chief executive, said in a press release. "They have made a lot of SBA 7(a) express loans, which used to be the strength of the largest banks."

The June loan approval rate for credit unions totaled 55.8%, down from 57.6% in May. Some credit unions reported that they had reached their yearly lending limit, which is roughly 12.3% of their total assets, Biz2Credit said.

Approvals from alternate lenders, such as accounts receivables financers, merchant cash advance lenders and mirco lenders, also decreased to 62.9% from a peak of 63.2% in May.

"When traditional lenders, get back into the game, it impacts the alternative funders, such as factoring and merchant cash advance companies, which generally charge higher interest rates than banks do," Arora said. "If banks are lending, small business owners are less likely to look for other options."

Best Bet For A Small Business Loan- Your Community Bank

Banks vary widely in rejection rate for small-business loansA Biz2Credit study found a wide range in large institutions' rejection rate of small-business loan applications. Bank of America's rate is 13.5%, while PNC Bank's is 2.3%. The study suggests importance for small businesses in building a relationship with a community or smaller bank.Big banks are rejecting most small business loan applications.