The Vital Role of Minnesota's Community Banks in Supporting Small Businesses Through a Pandemic - and Beyond
July 2023 | BankIn Minnesota
When the COVID-19 pandemic struck, small businesses faced unprecedented – and evolving – challenges. As they worked to keep employees and customers safe and pivoted business models to adhere to new regulations and consumer expectations, community banks worked to support these businesses however they could.
Beyond processing Paycheck Protection Program loans, community banks offered loan modifications and financial counseling to help their neighbors weather the storm, and they continue to serve as trusted advisors to the small businesses in their communities.
PPP Loans: Mitigating Complexity, Delivering Relief
The Paycheck Protection Program (PPP) was a loan program backed by the Small Business Administration and supported by the U.S. Department of the Treasury. PPP loans helped businesses keep their workforce employed during the pandemic via funds to cover up to eight weeks of payroll and benefit costs, offering a lifeline to small businesses grappling with the financial impact of the pandemic.
Like financial institutions across the country, Minnesota’s community banks were quick to process these loans to support their local businesses. But unlike larger institutions, community banks took the extra step in prioritizing personal assistance, guiding small business owners through the complex application process with a human touch.
By forging direct relationships between bankers and entrepreneurs, community banks ensured a swift response and efficient disbursement of funds, allowing businesses to retain their employees and keep their doors open (whether physically or metaphorically).
Loan Modifications: Easing the Financial Burden
Recognizing the immense strain the pandemic placed on small businesses, community banks in Minnesota provided loan modifications and payment deferrals. These compassionate measures helped alleviate the financial burden on struggling enterprises, giving them the breathing space they needed to navigate the crisis.
By offering flexibility and understanding, community banks proved their unwavering commitment to the success and sustainability of their local businesses.
Financial Counseling: Navigating Uncharted Waters
Beyond financial assistance, community banks in Minnesota offered invaluable financial counseling to small businesses. Leveraging their expertise and local market knowledge, community banks offered strategies to adapt, pivot, and make informed decisions to safeguard their businesses’ future. They proved to be trusted partners in ensuring their neighborhoods continued to thrive through an unprecedented period in recent history, and they remain just as engaged today.
Supporting Small Businesses: the Value of a Community Bank Partnership
Minnesota’s community banks have proven they are more than just financial institutions – they are pillars of support and catalysts for progress within their local communities. Community banks continue to work with small businesses in a variety of ways:
Access to capital: Community banks are key facilitators of growth for small businesses. They empower businesses to expand operations and realize their potential by providing vital access to capital through loans, lines of credit, and other financial services.
Local knowledge: Community banks possess an intimate understanding of the local economy and the specific needs of small businesses within their communities. With this knowledge, community banks equip small business owners with insights into market conditions, regulations, and other factors critical for their success.
Personalized service: Community banks pride themselves on personalized service, building relationships with small business owners based on trust and understanding. By taking the time to know their customers personally, community banks deliver tailored financial solutions and support, ensuring that entrepreneurs receive the individualized attention they deserve.
Networking and resources: Community banks offer small businesses resources, guidance, and support. They also facilitate connections with other local business leaders and organizations, promoting a network of support within the community.
The resilience and collaboration between community banks and small businesses will continue to be a driving force in Minnesota's economic recovery and growth. By choosing community banks as financial partners, small businesses gain not only access to capital but also a trusted ally invested in their success.
Are you a small business owner or thinking about starting a business? Find a community bank near you!