A recent report by IBM’s Institute for Business Value in collaboration with the Banking Industry Architecture Network (BIAN) highlights a glaring disconnect between the needs of small and medium-sized businesses (SMBs) and the products traditional banks typically offer.
For the Piermont Bank community, this data resonates all too well. According to the report, fewer than 6% of bank executives surveyed awarded their institution’s SME banking services an “A,” while nearly 50% gave themselves a “C.” These findings only validate the vision behind Piermont Bank’s founding.
Piermont Bank exists to bridge precisely this gap, offering tailored financial solutions that meet the unique needs of entrepreneurial companies and SMBs. By providing responsive, timely, and client-focused services, Piermont Bank is committed to fueling the growth and success of entrepreneurs, small and medium sized businesses that traditional banking often overlooks.
The Gap:
“SMEs expected an understanding of their unique business needs, tailored solutions and networking opportunities while banks prioritized apps, dedicated relationship managers and branch proximity.” – Banking for Small and Medium Enterprises Report
The Piermont Practice:
From day one, Piermont Bank has held a clear and unwavering mission: to redefine banking for today’s growing entrepreneurs and SMBs. By delivering innovative, customized solutions, the bank empowers entrepreneurs and SMBs to achieve sustainable growth and success.
In the recently reposted podcast on She Leads, host Adrienne Garland and Piermont Founder and CEO Wendy Cai-Lee engaged in a deep conversation on the need for financial products by SMBs and the market pain points. Cai-Lee highlighted Piermont’s steadfast commitment to understanding and addressing the unique needs of SMBs, enabling them to scale effectively through tailored, responsive financial practices. Below are some excerpts from Cai-Lee’s responses in this interview.
The importance of right-sized banking
For entrepreneurs and SMB owners, it’s so important to right size your bank partner, one that understands your pain points and is willing to work with you. Be it a connection with community development financial institutions (CDFI) or working through an SBA loan, you need a bank who is willing to get you there, that can manage your cash. As a digital bank, we, at Piermont Bank, respond quickly with quality. On average, Piermont takes three business days to deliver a deal, a fraction of the time some large banks need.
Piermont’s advisory approach to banking
Piermont Bank understands the pain points of entrepreneurs and SMBs. We make it our job to walk through the learning curve of business owners. We take the 30 – 60 minutes to understand your story and find you the right solution. We are flexible enough to customize products for your unique needs. A Piermont banker advises clients not in terms of the need to change their business models but helping them marry financing needs that’s reflective of their business models. Depending on the stage of a client’s business and what they need, we have a Rolodex of partners as well as networks that we believe can be most helpful. We serve as that bridge.
Flexibility in funding options – think beyond equity raise
Many startups and SMBs are stuck with the idea of equity financing. In reality, a combination of options can be available to businesses. Piermont bankers spend a good amount of time educating clients on various funding options at various stage of growth. Ultimately, funding really comes down to cost. Loans seem to be more expensive but it’s actually often cheaper than equity. Taking money from venture capitalists and private equity can be the most expensive financing because you’re giving away your ownership and potentially your control to run the business. With loans, you have the ability to repay, then you get to maintain all the upside of your business. It’s a balance because at different juncture of your business, it’s always a combination of different financing.
It’s noteworthy that Piermont Bank often works with private funds to create finance solutions that complement the needs of the funds and SMBs because we believe each business’ need is unique and cookie cutter solutions don’t always work.
Guidance for credit scoring
For entrepreneurs and SMBs, credit score is important. Banks pay a great deal of attention to it for regulatory reasons. Even when bankers are willing to be more flexible, they still have to adhere to certain examination requirements. However, a bank can always advise you to focus on paying off credit card debt, or at least make those debt current. You can have the debt, but you don’t need to have bad credit score.
Work with Piermont Bank
What the report by IBM and BAIN recommended for banks to do in order to tap into the white space to compete in the SMB market has been a common practice for Piermont for years. Contact us to start working with a Piermont banker to elevate your business to the next level.