Take It from a New Business Owner: Your SMB Bankers Just Don’t Get It

I thought I had a pretty good sense of what the banking experience for a small business owner would look like. After nearly 30 years in banking, I thought I understood the products, the processes, and the people. I thought I could navigate the process seamlessly.

I was wrong.

Earlier this year, I shifted my career to fully focusing on consulting in the banking industry. I registered my LLC with the state, received my IRS issued EIN, and updated my website. The next step was setting up my banking relationships.

Everything ground to a halt.

The U.S. Census Bureau reported the creation of 496,443 new businesses in February 2026, leading to over 5,000,000 new businesses formed every year. That’s opportunity for banks and credit unions. These businesses are being formed by your current customers or members.

Going through this process myself was one of the most clarifying banking experiences I’ve had in years. Nothing dramatically wrong happened, but I realize now that the gap between how financial institutions (FIs) think about onboarding versus how small business owners experience it turned out to be much wider than I expected.

Here’s what I learned and what you can do about it, right now.

Your Team Thinks This Is Routine. Your Small Business Owner Doesn’t.

For your small business banker, likely a consumer-focused personal banker, opening a new business account is a Tuesday. They know the procedures, compliance requirements, and which forms to pull and in what order. The process is familiar, and familiar feels like a task and not a relationship. In many cases, the lack of repetition with these accounts means they’re referencing manuals while opening the account.

For the small business owner sitting across from them, nothing about this moment is routine. Few banks and credit unions effectively deploy digital onboarding of new small business accounts, forcing business owners to visit a branch. Everything needed to get small businesses up and running is online, except their banking relationship. If you’re able to set up small business accounts online you have a competitive edge that should be promoted aggressively.

The banker is busy opening accounts. But the small business owner is focused on outcomes: How do they pay themselves? How do they separate business and personal expenses? Should they use a debit or credit card? What happens when a client pays them and they need to move money? How should they accept payments? How do they make sure they’re setting aside enough for taxes? How many accounts do they need? What’s all this going to cost?

Bankers, especially personal bankers in a branch opening small business accounts, are not thinking about those topics nor are they equipped to discuss them.

This is the gap, and it’s not about technology.

It’s a context gap and training opportunity.

Bankers who have never started a business default to process mode, walking customers or members through setting up an account without ever addressing the underlying financial questions. That’s not a criticism. But it is a reality we need to accept and fix.

Key Steps You Can Take Today

Training is the foundation we forget: Create training that is easily repeatable. Many bankers do not get the repetition required to truly master this foundation. Through the use of case studies, scenarios, role play, and manager or trainer engagement you can drill foundational needs into your team. Focus on the first 90 days of starting a small business to simplify your approach.

Context from real small business owners is invaluable: Many branch bankers have great relationships with small business owners. Tap into these relationships and capitalize on their knowledge by interviewing them for real context. Offer these small business owners an incentive for their time; every hour spent with you is an hour not growing their business.

The Relationship Window Will Close Faster Than You Think

Once your LLC is registered, it becomes public record and the financial marketing machine at competitors starts. Credit card offers. Checking offers. Any financial provider that can serve a small business starts reaching out. Every one of them is looking to steal your new small business relationship. They all have compelling offers that are richer than anything you’re offering. The marketing is flashy and eye-catching.

Your competitors know that these accounts have higher balances and more transactions than consumer accounts. These are valuable accounts that drive deposit growth and non-interest income. Plus, once they’re locked in with payments, connected to QuickBooks, and they’re using a credit card, it’s nearly impossible to change.

In many instances, your new small business relationship receives marketing from competitors before they receive anything from you. I know this because most banks and credit unions do not have a robust onboarding program for consumers; small business onboarding is nearly non-existent. And this was confirmed with my accounts.

Reality check: Your small business customer is often an existing consumer customer, but that existing relationship does not guarantee you win the business account for the long run. The FIs that win small business relationships are the ones that show up early, ask the right questions, and make the process easy.

“What we have consistently observed is that opening the account is not the defining moment in winning the relationship. Rather, it is what occurs in the days immediately following account opening that determines whether the relationship becomes primary. If operating activity does not transition quickly, it often does not transition at all. The institutions that succeed are those that actively guide businesses through these early steps and make it easy to become fully operational from the outset,” said Cale Johnston, Founder and CEO of Onsetto.

The missing piece: What bankers don’t appreciate, and I can attest to with my experience, is that time is unbelievably important. It’s easy to set up a new business account in 30-60 minutes online with national or digital providers, and I can do that sitting at my computer. To set up a small business account with many local banks or credit unions it’s significantly longer, requiring a trip to the branch, navigating clunky digital solutions, calling the contact center, or dealing with bankers who are unable to act as a trusted advisor to a small business.

Key Steps You Can Take Today

Proactively source small business accounts: Promote your services to your customer or member base. The rate of new small business creation is staggering. Whether it’s a new LLC, gig economy job, or side hustle, your customers or members are forming small businesses. Classic awareness marketing along with financial literacy content will help limit your competitors from stealing your opportunities.

Build urgency into small business onboarding: When a new account is opened bankers need to engage immediately. If you’re not in a position to run a multi-channel onboarding program, at a minimum you need to be prepared to call and email. Frequent checkins are invaluable, small business owners are learning as they go and don’t want to take the time to reach out to their bank or credit union. Being proactive matters.

Promote the basics: At this stage of a small business relationship they need to understand how to get paid and make payments. Focus on debit and credit cards, account to account transfers, ACH, and wires. National credit card companies are going to market to these new accounts aggressively, you need to be proactive and lock in your products so your new relationships don’t consider alternatives.

Most Important: Focus on Payments

Every small business must solve two problems immediately: how to get paid and how to pay others. These are not upsell opportunities. They’re table stakes and minimum expectations. If your bank or credit union does not have those conversations first, someone else will. And they’ll be leading with a rewards program, a sign-up bonus, cash offer, and a seamless digital experience.

Here’s what makes this particularly costly, payments are stickier with small businesses. Once a small business owner sets up their payment flows, connects their credit card to their vendors, links their checking account and credit card to QuickBooks, and starts receiving payments, they’re never going to switch. The friction of changing payment infrastructure, not to mention the time involved, is too high. Whoever wins the payments conversation early wins the relationship for years.

The details really matter. In one instance, I couldn’t find my account number in my online account when I had to invoice a customer. Instead of calling, I logged into my other account, found it in seconds, and now all my ACH transactions flow through that second account. My first provider effectively lost out on my deposits because they made it impossible to find an account number.

In another instance, one provider made it significantly easier to set up ACH transactions between my business and personal accounts. Making it easy to pay myself was another simple decision point when deciding who is my primary financial provider.

That’s insight that’s lacking inside many banks and credit unions and leading to limited loyalty, smaller deposits, and fewer transactions. Which in turn all leads to lost profitability.

Community banks and credit unions often cannot match the rewards programs that national providers offer. That is a real competitive disadvantage and it is worth being honest about, which means the conversation has to happen earlier and be framed differently. Your advantages, local relationships, faster problem resolution, and a banker who actually knows them only matter if the small business owner knows you are willing to invest the time and make it easy for them to do business.

Key Steps You Can Take Today

Payments need to be part of every onboarding process: This is not a sales pitch, it’s discovery so you can align with real needs. Two questions help: “How are your customers going to pay you?” and “How are you planning to handle day-to-day business spending?” The answers tell your banker exactly which products to introduce and in what order. This costs nothing and takes two minutes.

Lead with a debit card: A business debit card should be offered at account opening without exception. It is the most basic spending tool a business owner needs and is a gateway to a credit card.

Promote credit cards: If your rewards program is competitive, lead with it. If it is not, lead with what you can offer, such as ease of access, local support, a banker they can actually call. But have the conversation, within weeks they’ll be getting marketing in their mailbox from competitors.

Connect to tools they’re using: QuickBooks is the classic provider, but there are more. Small business owners will need to record their activities and the bank or credit union that makes it easy for them wins. All of these services have amazing educational tools online you can share with bankers to help them understand the small business owner’s perspective.

Set up ACH: Most banks and credit unions struggle with transferring funds between business and personal accounts. It makes sense, but not to the small business owner. Ensure you make the education and process clear and easy to understand. Being proactive with establishing this connection will save poor customer service issues down the road when a transfer needs to happen immediately.

What This All Adds Up To

I opened my business accounts as someone who has spent nearly 30 years in banking. I knew what questions to ask. I knew what products existed. I knew how the process worked from the inside. And I still found the experience confusing, inconsistent, and full of moments where FIs could have shown up as a partner and didn’t.

Most of your small business relationships do not have that background or time to invest into the process. They may be navigating this for the first time, while simultaneously trying to launch something they have bet their professional lives on.

The good news is that every single issue raised in this article can be improved without a major investment. Better training. Proactive outreach. A payments conversation that happens every time. Easy solutions that simply take work and commitment.

Over five million new businesses will be formed this year. Many of them belong to people who are already your customers or members. Banks and credit unions are not losing small business relationships because they cannot compete. They are losing them because they are not fully showing up at the moments that matter most. The banks and credit unions that close this gap will win relationships that compound for decades.