Opinion - Commentary

Op-ed: To help Main Street businesses, look to Main Street banks

John D. Steinmetz
Key Points
  • Local community banks were among the most prepared and willing to step up during these unprecedented times, releasing loans far earlier than many of their Wall Street counterparts.
  • Working more like a start-up than an established company, community banks bring a sense of urgency that benefits entrepreneurs.
  • Community banks don't have "fortress balance sheets" or global call centers, but they do have long-time relationships in their communities.
A normally busy Main Street is deserted as the small businesses that line the business district remain closed after the governor instituted a shelter-in-place order in an attempt to curtail the spread of the coronavirus (COVID-19) on March 24, 2020 in Rockton, Illinois.
Scott Olson | Getty Images

During our bank's 108-year history, we've weathered the Great Depression, the Dust Bowl, two World Wars, the September 11th attacks, and the Great Recession. There have been many sleepless nights over the decades, but few were as monumental as the night of April 3. On that day, we processed a government-backed loan at 3:30 AM. 

We've been working around the clock ever since the CARES Act was signed into law, and we're not alone. Fellow community banks across the country are pulling late nights as well, processing as many Small Business Administration's Paycheck Protection Program loans as we can to keep our friends and neighbors off the unemployment line. For our part, we've funded loans as small as $1,400 and as big as $7.8 million to give businesses that were thriving just four short weeks ago a fighting chance.

Through no fault of their own, small businesses find themselves in uncertain times. Those looking to secure an SBA PPP or Economic Injury Disaster Loan understandably have lots of questions. Does my company qualify? Why is my bank not participating? Will there be enough money for my business? While the government took some admirable steps in getting funds ready for small businesses, it's the banks that are learning the program, adapting their processes and answering those questions in real time.  

 This is where Main Street businesses can and should look to Main Street banks. Working more like a start-up than an established company, community banks bring a sense of urgency that benefits entrepreneurs in any environment and most certainly in today's business climate, where relationship-driven focus can be the delta between life and death for small companies.

We're not, in other words, a Wall Street Bank. And in this case, that's helped. While we didn't have their "Fortress Balance Sheets" or global call centers, we do have long-time relationships in our communities. We frequent the businesses we lend to; we know the owners and have shaken their hands.

Perhaps that's why the local community banks were among the most prepared and willing to step up during these unprecedented times, releasing loans far earlier than many of our Wall Street counterparts.

In recent years, some have questioned if there was still a place in society for community banks. Truth be told, there were times when I asked myself the same question. Every bank wants to be top of mind when corporations seek a line of credit or finance an expansion. But in moments of crisis — when agility, the capacity to think outside the box, and relationships are vital — our bank and those like it had a distinct advantage.

Of course, I'd like for companies seeking assistance to look no farther than their community bank, but this moment in time has a policy dimension as well as a practical one. It's important for people in positions of power and influence to consider the network of smaller, local banks that serve small business. While we don't always make headlines, we do make a genuine difference. Just ask the entrepreneurs, families, and communities that are stronger today than they were last week, because of a community bank that answered the call to put people first. 

John D. Steinmetz leads Vista Bank, a 108-year old Texas-based bank.