When it comes to obtaining a small business loan, you need to bear in mind that not all banks are equal. In the market, you will find out that there are both bigger and smaller banks. If you want a business loan, it’s not a must you go to larger banks since even smaller banks can provide some benefits. Below are some reasons why a local small bank should be your priority when you think of a business funding. It also explains why you need to consider merchant cash advance when looking for a business funding.

Financing decisions are made locally

Note that both the community-based banks and merchant cash advance lenders make their funding decisions at the local level, not like huge banks whose loan application and approval are processed in distant head offices. Since someone you familiar with and knows your business will handle your loan request, he or she ponders your potentiality instead of using crunching numbers. By this, your small business loan will be approved easily at a local bank as compared to their counterparts.

All deposits stay local

Typically, huge financial institutions will invest their deposits where they will produce higher income, mostly out of the state or even abroad. On the other hand, local banks choose to invest in their communities so that the investment can benefit small businesses and neighboring economies. By doing this, they also try to make it easy for local small business get financial support.

Lower fees and better interest rates

It is evident that small banks charge low fees for their small business loan products than bigger banks. There is no reason for committing to higher loan repayments when you can get a cheap loan product instead. Note that the rate of interest will vary between lending companies and local banks tend to offer small business loans at a lower rate than big banks. Take advantage of these affordable rates of interest to keep your business’s costs down and get some additional capital to expand your business.  Even though merchant lenders are a bit expensive, you will not be worried about failing to make your debt payments on time since the merchant cash advance lender will automatically deduct a set portion of your credit card sales until the whole amount is paid. Note that you will only pay the debt once your business makes sales.

They offer similar services and technology as big banks

Obtaining your small business loan from a local bank does not imply that you are compromising on your entire banking experience. Note that local banks provide a wide range of small business financing alternatives and the most recent remote banking system. On top of that, these banks provide free calculators to assist you in mapping the financial future of your business. Note that a local bank is capable of handling all the financial needs of your business since it has checking and saving accounts specifically designed for small businesses.

Alternatively, if you realize that you can’t qualify for a small business loan from a bank, you can opt for a merchant cash advance. Once you receive a merchant cash advance, your business acquires an advance working capital in exchange for a portion of future credit card receivable. However, merchant cash advance is not a small business loan since you will be trading your future revenue in exchange for immediate access to business funding.