Small Business Friendly Banks
It is important to find a “Small Business Friendly Bank”. Generally, these banks have a history of lending to small businesses and know how to utilize government backed loan programs. One major characteristic of a “Small Business Friendly Bank” is a tendency to lend money with more weight given to the experience of the entrepreneur. Consequently, these banks are known as Character Lenders.
Banks that lend money with more weight given to credit, collateral, and capital invested are known as Ratio Lenders because they concentrate more on the numbers than the abilities of the owner.
Credit Unions are another possible source of small business friendly capital. Not all credit unions offer commercial (business) loans so check with your area credit union before assuming they have financing available. Most credit unions that offer business loans have a tendency to be more liberal in their lending practices and can many times offer better interest rates and lower fees.
Finally, as a general rule, locally or regionally based banks are typically friendlier to start-up companies than the national banks although there are exceptions to this rule. Both Wells Fargo and US Bank run in house programs geared to small business and start-up businesses.