Small businesses, merchant services in Utah work hand-in-hand
One of the great joys that our staff at First Utah Bank has is providing business banking for small companies that have either relocated to our state or decided to start up in Salt Lake City or other areas in Utah. Helping start or continue a small business owner’s dream of being their own boss and providing a great service to the community is just one of the reasons why we love the business we are in.
As it happens, the impact of small businesses cannot be overstated — just like the impact of community banks, like First Utah Bank, that provide merchant services. There are two interesting statistics that truly showcase the impact we each have on the fiber of American life. The Small Business Administration Office of Advocacy found that small businesses represent 99% percent of U.S. employer firms, while the Independent Community Bankers of America state that 99% of lenders in the U.S. are considered community banks.
Let’s explore how small businesses, defined as those with fewer than 500 employees, and community business banking have an impact not only in Salt Lake City, but in all areas of the state and country.
Small business impact: much larger than you may think
Forbes magazine recently outlined some impacts that small businesses have on the American economy. While the biggest firms get the big headlines, for better or worse, it’s the smaller businesses that drive job creation, exporting goods and keeping the economy strong.
The SBA Office of Advocacy states that all but 19,000 businesses out of 29.6 million are considered small businesses. They also represent a big chunk of job generation, driving three-fifths of net new jobs. That means 47.8% of all non-public employees work for small businesses — a staggering 58 million people.
And, it really is a help to families to have a healthy amount of small businesses in the economy. According to the SBA, close to 1 in 5 businesses are family owned. The largest percentages of these businesses are classified as company/enterprise management (46.4% as family-owned), real estate or rental/leasing companies (37.3%), and food services/accommodations (33.2%).
There are also a surprising number of small businesses that are operated at home. About 25% of small businesses are set up this way, and include those in the tech services, construction and information sectors.
The high-tech industry is also dominated by small businesses, something anyone who does business banking in Utah knows well. There are about 248,000 small high-tech firms, which make up 98.5% of all businesses in that industry.
When it comes to the role small businesses play with exports, the numbers also look strong. They represent 97.6% of all exporting firms, about 288,000 businesses. They contributed 32.9% in total known export value, which adds up to $440 billion.
There’s additional good news about the impact of small businesses on a national level. With the most recent stats in 2016, the SBA reports that the one-year survival rate for small businesses is at 79.9%, which is the highest it has been since 2006. More than half of small businesses also make to the 5-10 year mark.
Doing your business banking in Utah with a homegrown leader
First Utah Bank is proud to be one of America’s leading community banks. Our mission to give back to our local community and help small businesses grow is alive and well in the thriving economy in the Beehive State.
The ICBA has shared several attributes that give community banks an advantage over the larger ones when it comes to supporting small businesses. As they point out, banks like ours answer to the people who live and thrive in the community, not to shareholders spread out across the world.
The community focus at an institution like First Utah Bank starts with where the deposits go. Banks with resources in multiple states will take deposits from one state and then lend that money in another. With a community bank, loans are channeled through neighborhoods where the businesses are located.
There’s also a personal relationship with a community bank that you don’t get with a larger one that uses solely credit scores or other criteria to lend. At a bank like ours, we know you and your own circumstances, and can bring into account factors like discretionary spending and family history into our loan decisions.
Smaller banks, like smaller businesses, are also more nimble when it comes to innovations. They often have access to innovative products and services and invest more readily in tech providers that specialize in high-tech services. First Utah Bank’s own investment in online banking and tech-savvy treasury management options are great examples of how we move our own business forward and still make it convenient for you.
We’re also well aware that customer satisfaction is important to meeting the needs of small businesses. The Federal Reserve recently shared a report on small business credit, finding that community banks were the ones most preferred for lending. In fact, 79% of small businesses stated that they were satisfied with their overall banking experience. That’s compared to 67% for larger banks and 49% for online banking businesses.
If it’s accessibility, quick decision-making and the feeling that you are really being heard that are you seeking, try us at First Utah Bank. We love our role in small business banking and merchant services for Utah and Salt Lake City. You can find out more on our website, or call First Utah Bank at 801-308-2265.