The recent banking turmoil has been a jolt for small businesses of all stripes, spurring many to scrutinize their banking services and mull whether or not they should make changes.
Experts say it’s probably a good idea for small businesses to diversify funds and make sure they’re in close contact with their banker, but emphasized that in the short term their bank accounts are safe because regulators have shown they’re. And while big banks may seem like a safer option for their savings, regional and community banks have advantages too.
“It’s really scary,” she said. “It just opened up my eyes to the possibilities of things going very wrong in this country. “The SVB has made me think we should have an additional bank, perhaps one of the big banks, for broader diversification,” so that all of her money would be insured and because it’s safer to use more than one bank in case one goes under, she said.
For example, his bank specializes in B Corps., for-profit corporations that are required by their shareholders to also produce a public benefit. And CDFIs focus on impoverished communities and can better service some small businesses that bigger banks would classify as “high-risk.” His frantic clients were relieved when the government stepped in and they were able to access their funds that had been at SVB and make payroll.
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