5 Ways Financial Institutions Can Acquire Small Business Clients

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(Last Updated On: September 14, 2023)

What’s your take on the small business sector? Are they in need of your financial services? Is there a benefit to attracting them? A lukewarm response to these questions isn’t unusual.

Many financial institutions see this segment as high-risk and costly to serve, with low growth potential. Is it true?

For most institutions, no. Small businesses can be lucrative clients for banks and credit unions. They can generate substantial revenues while serving as a referral source for new personal accounts.

It’s about, as so many other things, implementing the right business model and digital strategy. More succinctly, a good plan.

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Lots of ideas to build successful plans.

This article explores how banks and credit unions like yours can attract, serve, and benefit from small business accounts. Then we’ll share 5 tips you can use to “win” the market. Because if you’re going to do it, do it great!

Why Small Businesses?

The Financial Brand agrees that small businesses are huge opportunities for financial institutions. Embracing targeted strategy and technology opens the door to an over $600B loan volume.

Nice chunk of change. Even divided amongst a whole lot of financial institutions. If only there were enough small businesses to go around…

Good thing there are 33.2 million small businesses in the US, making up 99.9% of all businesses. They provide jobs to 46% of the private sector workforce. 63% of all new jobs created since 1995 are at small businesses.

These are big numbers that underscore a huge opportunity. It’s just waiting for credit unions and community banks like yours to take advantage.

Small business owners aren’t well-served by their current banking arrangements. Seriously. 63% of small business owners feel their bank doesn’t appreciate or value their business.

Two Women Pointing at Laptop in Office

They want (Read: Need for best business operation) banking products customized to their needs. Tech-savvy or not, they’re craving personalized banking. Can you deliver?

Help small businesses while opening up a new market for your institution. Profits and community good: A nice combination.

The needs of small businesses go beyond checking and savings accounts, or a robust online banking platform. Let’s look at some of the things a small business team wants to see. How many do you already offer?

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What Products Can You Offer Small Businesses?


“You have to spend money to make money.” While that old adage is of questionable validity today, it’s a fact of life that many small businesses need loans to stay operating. 33% of small businesses say cash flow is their biggest concern.

And for most, it’s a huge challenge. There’s an 80% chance they’ll be denied.

The National Small Business Association reports that business loans play a fundamental role in the growth of small businesses. These funds go towards purchasing inventory, equipment, or real estate, or to otherwise expand their business.

In 2017, 75% of small firms secured financing, through loans, credit cards, and venture capital. Given the challenges presented above, the majority did so through less-than-ideal arrangements. Is that serving members?

You can do better.

Investment Services

Two People Talking in Office

Individuals aren’t the only ones who invest. Your financial institution has considered it, right? The same goes for small businesses. And you can offer those investment services. Guide them well while helping increase income through investing a portion of profits.

Whether it’s stocks, bonds, real estate/mortgage, or staying safe with CDs and money market accounts, it’s all about working together to maximize their returns.

Note: On major market swings, investing can feel like the worst idea ever. That’s why you serve as an advisor to the business, so they can make investment decisions matching their goals, risk tolerance, and time horizon. We’re not talking day-trading here.

Streamlined Payments

Paying employees is a pain. Ask your own payroll department. What about recurring payments? Anything that consumes time costs money for a small business. Save them both by helping to automate payroll and other recurring payments.

Corner of Check

Better managed cash flow means a better-run business able to do what it does best…its business.

Financial Advice

Should we remodel our office? Is this equipment a good investment? What options do we have for responsibly saving income and ensuring continuous working capital? Your credit union can be the knowledgeable advisor for small business clients.

Help business owners make their money go further with sound financial advice. And maybe take a look at your existing business checking.

Corporate Credit Cards

Knowing what you bought and how much was spent is important for tracking expenses. Empower businesses with corporate credit cards that offer easy-to-use and robust purchase tracking. Plus, everyone loves rewards and benefits!

Look at what you can bring from your personal cards or introduce specifically for small businesses. Ask local businesses what they want from their credit cards. You might be surprised!

Professional Recommendations

Global Network
How large is your network?

You’re more than a secure place to put money. Financial institutions have networks of account holders, industry partnerships, and other arrangements. In other words, you know a lot of people.

If a small business needs a lawyer, HR consultant, accountant, or marketing agency, your bank can use its extensive network to help. Create a portal to make accessing this database easy and a benefit of banking with you (maybe each even offers discounts!).

5 Ways To Acquire Small Business Accounts

There’s one thing every small business needs: A business banking partner, giving them quick and convenient banking services so they can focus on running their business. How does your financial institution size up?

Let’s look at five things you need to be a desired small business partner.

1. Tailor Service Model & Product Portfolio For Small Business Clients

The first step in acquiring small business clients is making sure your service model and product portfolio work for them. What do they need? If you’re sitting there saying, “well, how are we supposed to know…isn’t that why we’re reading this article?”, you’d be right.

Small businesses prioritize price, service quality, and convenient branch locations when choosing an ideal financial institution, according to Raddon. Your first step? Review your existing business offering and see how it matches up.

Does your current product portfolio check these boxes? If so, it’s all about the marketing. If not, it’s time to develop services and products that appeal to businesses.

Additionally, simplify your portfolio to get rid of redundancy and overlapping products. This helps reduce costs, make your lineup easier to understand, and increase cross-sell opportunities.

Your goal is to help your new business customers get the best experience for their needs.

2. Expand Digital Platform

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Make mobile your kingdom.

Will demand for digital access of services go up or down? Yes, it’s a silly question. Of course it’s going to increase. Are you prepared?

Your business services need quick, intuitive, and functional tools accessible anytime, anywhere. What’s included in this platform? All the “basics” your personal accountholders expect, plus some business-specific tools.

Consider a “digital shop” where small business account holders can access all your services, connect with other professionals, and access fast credit decisions (Remember the need for financing? We’ll discuss more below.).

Further expand your digital platform through partnerships, acquisitions, and through your own “innovation labs”.

Partnerships with Fintechs

Most likely, the easiest of these three is partnering. What are some things Fintechs can help you offer?

  • Payroll platforms
  • Cash management solutions
  • Foreign currency exchange

If a business uses it, chances are there’s a digital-first solution out there. For those which make sense, bringing them under your services umbrella reflects well on your product offering.


Besides expanding digital platforms, acquisitions offer opportunities for cost-saving, greater reach, and improving member experience.

We understand this isn’t an option for many institutions. Those who are considering in-house or outsourced development may want to look at the economics of acquiring a company which offers a solution you want.

Innovation Lab

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Learn to see the reality behind the code. Woah.

Financial institutions have more personal data points than Amazon. It’s true! No one is better equipped to provide data-driven insights to your customers. The challenge is in gathering, organizing, and processing this data.

For example, your transaction data can help you provide proactive guidance. Does a business make consistent, recurring payments? What if you could notify them when that amount has substantially changed?

Remember, “ain’t no one got time for that!” Know your customers and deliver the insights they need.

Use this data to craft more effective service models, as well as more appealing pricing structures for products and services. Things like loan tracking and credit risk modeling are ripe for improvement.

What else can you imagine? Because your data can help make it happen.


One final thing: Your account-opening process. It has to be quick, easy-to-complete, and accessible on any device. Just like your personal platform. Remember, business owners are people, too!

3. Ditch One-Size-Fits-All

Two Measuring Tapes Crossing

The small business segment is bigger than you think. According to the Small Business Administration, it can be a single entrepreneur paving their way or a 500-person company making millions per year.

Thus, approaching your small business programs as one-size-fits-all won’t work. They’re as varied as your members, with different goals, challenges, and needs.

Instead, build small business buyer personas (they’re just like people personas, only for a business!). Use this to plan out your service offering. What might this look like?

Business Persona Example

So you want to promote your merchant processing solution. It facilitates instant credit card payment, letting businesses use those funds right after receiving. Everyone will want it, right? Perhaps.

Let’s say your buyer persona included local restaurants (goodness knows they can use our help). The merchant processing is a huge help to them, providing working capital. This is a good fit.

Another small business in your area is a manufacturer working on a net 30-day invoice. Do they care about immediate use of funds? Not particularly. Consider what appeals to whom and tailor your marketing and program to fit.

Be Choosy

Strive to meet the needs of a few kinds of small businesses with tailor-made packages. Trying to be everything to everyone (besides being a great song) is not helpful.

Just like your other marketing, it’s about knowing your audience and giving them a reason to choose you.

4. Make the Lending Process Painless

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Help keep businesses busy, not empty. Of course, they might be remote…right?

82% of small businesses fail due to cash flow problems. Can you save all of them with appropriate financing products? Unlikely. However, it’s a huge challenge for most businesses to even get considered for financing.

Remember, the vast majority get denied. Your financial institution can help ensure their survival and continued success, while increasing lending revenues. It’s about making it accessible and easy.

Unfortunately, you know that the business lending process can be painstaking. With exhaustive requirements and a time-consuming approval process, it doesn’t exude easy.

Yet there’s a massive opportunity if you can overcome that challenge. According to a McKinsey report, 30-40% of small businesses will take their deposits to another provider, if they can access easy lending.

“Easy lending”: Without the daunting and time-consuming application and approval process.

Therefore, your bank or credit union just got an ultimatum: Build it and they will come. If you can make your lending process painless, you’ll attract and retain more small business accounts.

Disclosure: We work with a firm that helps your financial institution perform this easy business lending. And if your institution cannot approve them, they are connected to a network of other lenders who might. Through your platform.

This is more blatant marketing than we typically tolerate within the Learning Library. However, in this case, the product is so perfectly suited that we felt it a disservice to go without mentioning.

5. Give Small Businesses Reasons to Come. Then Stay.

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Loyalty comes from mutual respect and trust.

Small business clients will stay with your bank or credit union if you give them reasons to do so. They want to get value, engage with you and feel delighted.

Delight business customers by exceeding their expectations of a banking relationship. Add value by helping them grow their business. How? Look to differentiate from the crowd. So what’s the crowd saying?

Example From A “Big Bank”

I received a sales piece from PNC Bank in the mail. Yes, physical mail. Here’s what they thought I wanted:

“Today’s the day to make your business banking easier. Open and use a qualifying new PNG business checking account and earn $200.”

Ok, the immediate value proposition is clear. How will they make my business banking easier?

“It starts with a conversation with a PNC banker – we call it a Cash Flow Conversation. We’ll listen and discuss your business’s unique needs and then provide guidance on the right foundation – a business checking account – as well as cash flow tools (emphasis mine) to help make banking easier.”

How many of the pain points did they address? It began with making banking for their business easier (5) and then explained how (2). By having an account with them, you get personalized service and offerings (3). Plus, they will help you with cash flow (4).

They even included an offer to save money just for joining, and included ways to avoid any monthly fees (1).

That’s all five in one mailing! How can your financial institution match, or even exceed, such an offering? Hint: It involves following the guidance above!

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Further Differentiate & Engage Clients

Plus, go even further with opportunities for small business clients to bond and engage with you. Consider business-focused webinars or other events that show you are actively working to help them succeed (beyond just holding their money).

As we touched upon above, add value where you can. Offer extras that provide additional benefits for their company and employees. Perhaps Value-Added Business Checking?

Bottom Line

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Small businesses are an untapped and lucrative segment for financial institutions. They can help you bring in new revenues and account holders. At the same time, you can actively help them be a better business!

The institutions which recognize the value of small businesses, and create a compelling reason for them to come will lead into the future of banking. It’s also some great competitive advantage.

What’s the secret? Deliver meaningful value without adding unnecessary complexity and cost. Then, use technology to offer unique and personalized experiences for all your small business clients.

This isn’t our first trip down the small business path. Our Checking section has a number of articles about attracting them. Subscribe to the Learning Library so you don’t miss any future insights.

Image credits: Coffee shop by Nafinia Putra & cat laying with dog by Krista Mangulsone on Unsplash. Crumpled blue paper on idea sheet by fancycrave1. Women in office by u_390ap8znhu. Check by Robert Owen-Wahl. Global network by Gerd Altmann. iPhone castle by David. Matrix by 51581. Measuring tape by Arek Socha. Modern office by MagicDesk. Open sign by Paul Brennan. All from Pixabay. Two people in office by The Coach Space on Pexels.

Joe Winn - CU Geek

Blogger. Speaker. Futurist. Part-time Jedi.

Dedicated to helping your credit union, large or small, deliver mission-focused financial empowerment to your members. And make a positive impact on your community while you’re at it.