#USA #Kansas City #business support #small business loans #Academy Bank

New Academy Bank Research Sheds Light on Small Business Loan Preferences

Academy Bank has recently published significant research indicating what small business owners value most when seeking loans. The findings suggest that simplicity, speed, and human interaction are the top priorities for entrepreneurs. This comprehensive study surveyed over 220 small business owners across varied sectors, emphasizing the vital role of banking relationships in the growth of small businesses.

Understanding Small Business Needs

Small businesses serve as the backbone of the economy, and acquiring business loans is a critical component for many entrepreneurs aiming for growth. Academy Bank's report titled "Business Loans and Banking Relationships: What Matters Most to Small Business Owners" reveals essential insights into how business owners approach financing, the challenges they face, and their expectations from financial institutions.

The research uncovers a distinct hierarchy of importance among key factors that small business owners consider when choosing their banking partners. The three most crucial elements noted by the respondents are:

1. Ease of the loan application process (56.9%)
2. Competitive interest rates (54.1%)
3. Personalized service and financial guidance (52.7%)

These statistics underscore the necessity for banks to provide quick, uncomplicated financial options coupled with knowledgeable support. As Chuck Frederick, Chief Retail Officer at Academy Bank, states, "Small business owners are not merely seeking a lender; they desire a partner who comprehensively understands their business landscape and makes financing accessible."

The Shift Towards Digital Solutions

While the majority of small business owners still seek personal interactions in banking, the research found a significant generational shift in preferences. Nearly 75% of all business owners would like some level of face-to-face engagement. However, the preference for digital methods varies widely among age groups:

• - 56% of Gen Z (ages 18-29) prefer fully digital or hybrid banking services.
• - Only 17.7% of Baby Boomers (age 61+) are inclined towards this approach.
• - Millennials (ages 30-44) and Gen X (ages 45-60) fall in-between with 43.3% and 28.6%, respectively.

As Jodi Vickery, Chief Digital Officer at Academy Bank, notes, this generational transition signifies a growing expectation for both seamless digital access and high-quality service. Banks that can effectively accommodate these dual expectations are poised to thrive in the evolving landscape of small business banking.

Borrowing Trends Among Small Business Owners

Academy Bank's research further highlights the significance of loans in small business operations. Approximately two-thirds of the surveyed entrepreneurs reported having borrowed funds. Among them, nearly 70% borrowed amounts of $100,000 or less, with a focus on growth-oriented objectives:

• - 63% utilized funds to purchase equipment or inventory.
• - 53.4% expanded their operations, which could include opening new locations or hiring additional employees.

Moreover, managing cash flow (43.8%) and marketing or advertising expenses (30.1%) were cited as common reasons for obtaining loans, indicating that small businesses often juggle several financial responsibilities simultaneously.

Tailored Offerings from Academy Bank

Academy Bank prides itself on catering to the diverse needs of small businesses by providing:

• - A customized lending application experience—available online, in-branch, or via a relationship banker.
• - Automated underwriting for loans below $50,000, allowing for prompt decisions often within a single business day.
• - A range of business banking products, including traditional loans, lines of credit, and SBA loans.

Frederick emphasizes, "Our lending solutions are crafted with the business owner in mind. Whether you're a startup seeking funds at midnight or an established enterprise looking for advice, we endeavor to meet you where you are."

Conclusion

The insights gathered from this study illustrate the evolving needs of small business owners, highlighting the importance of simplifying the borrowing process while providing essential human support. As the world continues its shift towards digital solutions, it remains crucial for banks like Academy Bank to adapt their offerings to meet the diverse preferences of their clients across generations. For those interested, a detailed white paper on the study can be accessed through Academy Bank's website.