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Lessons from PPP Loans: How Relationship-Driven Community Banks Won the Day

PPP: the three letters most bankers might never want to hear again.

Those three simple letters may trigger thoughts of long workdays (and nights), frustrations with trying to navigate the government’s online portal in the middle of the night, and nonstop calls from panicked small business clients for years to come.

However, during the pandemic – the darkest time for small businesses and our economy in nearly 100 years – a beacon of hope, trust, and salvation shone bright: community banks and their focus on relationships.

Small Businesses and the Beginning of COVID

Before I joined Versique in February of this year, I had a long career in community banking. I saw firsthand how community banks were built on deep-rooted relationships, where each client was more than a number on the balance sheet.

During the initial wave of COVID in early 2020, we did our very best to keep our small business clients afloat. We serviced tens of millions of dollars worth of PPP loans for hundreds of clients.

I recently met with the Chief Credit Officer for a local institution, and his bank’s experience was similar – 18-hour days, attempting to upload to the SBA portal in the wee hours of the morning and processing applications and verifying payroll reports for weeks on end.

Then suddenly, we started to get calls from new clients. Small business owners who traditionally banked at the “big box” banks were now being shut out. They weren’t even able to apply for the emergency funds they so desperately needed. The banking giants were unable to move as quickly and nimbly as the community banks, nor did they possess the intimate knowledge of their customers to process applications efficiently and correctly. 

Why Small Businesses Turned to Community Banks for PPP Loans

The small businesses turned to community banks because of our values. We were focused on relationships, not just dollars and cents. Our bankers took the time to learn about their clients, their businesses, their families, and hobbies. Community banks cared about people. They were the ones who focused on partnerships, not transactions.

If the primary focus of community banks wasn’t the balance sheet, you might be wondering how our business model was sustainable.

Community banks are successful because they operate on institutional pillars similar to the core values at Versique: Collaboration, Continuous Improvement, Community Engagement and Winning through Service and Trust:

  • Smaller banks consist of agile teams who collaborate daily and wear many hats.
  • They are able to adapt and continuously improve as the SBA issued and re-issued new guidance protocols on a nearly daily basis.
  • Because of their engagement in the community, community banks knew the ins and outs of their clients.
  •  Through their history of high-level service and trust they were able to quickly assist their existing and new clients – calming their fears during a period of unprecedented turmoil.

Recruiting the Right Talent for Community Banks

If the pandemic and subsequent economic uncertainty has taught us anything, it is that deep-rooted relationships and true partnerships are more important than ever – whether in business or our personal lives.

I am proud to be part of an organization that eschews the transactional connotations of the search industry and look forward to developing more long-lasting, meaningful partnerships in the better days ahead.

Is your bank looking for expert talent whose commitment to values can set your institution apart from the other banks? Contact our Banking and Financial Services Recruiting Team today. We’re looking forward to hearing from you. Contact us today!