WHAT SMALL BUSINESSES WANT

According to the American Counseling Association, the most common thread in broken marriages is a communication breakdown. It's no different in banking. Poor communication often leads to dysfunctional or severed relationships. The first step in healthy communication is to figure out what the other side wants. To get you started, here are three things small businesses want from their banks. Small business loans - During the recession, lending to small businesses dropped precipitously. While a number of indicators signal an improvement in access to loans, there are still plenty of small businesses who can't get them. As such, many of these businesses are turning to creative sources. They are leveraging accounts receivable financers, merchant cash advance lenders, micro lenders and others to get funding. The good news is that according to the Oct. Biz2Credit Small Business Lending Index, community banks approved more small business loans than they rejected for the first time since the Great Recession. Small bank lending approvals jumped to 50.1% in Oct. from 47.6% in Sep. At the same time, however, alternative lender approval rates rose slightly to 64.7%, up from 64.6% in Sep. The figure for alternative lenders was the highest recorded since the Biz2Credit Index began. While it's a good sign that the credit crunch for small businesses is easing, the risk for banks is that when the economy improves significantly and banks can afford to lend more, previously turned away business customers may be unreachable. While you shouldn't be lending to every Tom, Dick and Harry who comes in the door, at the very least consider borrower appetite for alternative funding before closing potential windows of opportunity. Advice - Only 29% of small business owners describe themselves as "very savvy" regarding financial matters, according to a recent Bank of America Small Business Owner Report. When seeking advice, they tap into a broad network for help, including accountants/bookkeepers (75%), other small businesses (50%), financial advisors (48%) and friends/family (40%). Community banks should make sure to move into a trusted advisor position, by leveraging these resources and providing an easy path to communicate with your bank. The survey also found that 48% of small businesses said the "ability to work face to face with a banker in my community" is the most important quality for a bank to offer. That feeds right into community banking. By taking time to get to know customers and developing strong interpersonal relationships, your bank can go a long way in becoming the advisor of choice. Reasonable fees - While banks can't afford to give services away for free, caution in levying fees is required. The fee equation is particularly important when it comes to profitable customers. Small businesses don't necessarily expect everything for free, but they do expect fees to be reasonable. Find the balance of recouping your cost and earning a reasonable return and you have found your Zen. To maintain healthy banking relationships, communication is everything. For maximum success, know what your customers want and communicate effectively as you deliver it.