How Community Banks Will Support the Rebuilding of Small Businesses in Texas

 How Community Banks Will Support the Rebuilding of Small Businesses in Texas

While the last several months have presented various challenges for industries across the state, for local small businesses, it has been a season of survival mode. As small business owners balanced decreases in revenue, extended executive orders, and a desire to support and keep staff as long as possible, it quickly became clear that without external funding, temporary closures were likely to become permanent.

According to a recent survey from the Census Bureau, about 7 percent of US small business owners reported that they had no cash on hand, and another 9.5 percent said they cannot cover more than a week of operations. All told, about half would be out of cash within a month, and only 17 percent said they could last three months or longer without revenue.

When the government decided to provide emergency aid and relief loans to qualifying small businesses across the country, banks were given a central role, which involved the approval and distribution of nearly $50 billion in Texas PPP loans, according to Texas Bankers Association records. The survival of many small businesses was dependent on the success and approval of relief loans and government payments, which was a direct reflection of a bank’s ability to follow through and provide support during a crisis.

Community banks have played—and will continue to play—a key role in supporting and reestablishing small businesses across the state as we work to reopen the Texas economy. For many small businesses, a partnership with a trusted community bank now proves to be more valuable than ever.

As small business owners look to the future, their livelihood will in many ways depend on their ability to build upon the foundation that carried them through the uncertainty of the pandemic. The role community banks serve for both Texans and their small businesses will continue to grow as the state rebuilds.

Below are a few examples of how community banks have supported the economy through this unprecedented period, and with how they will aid in its return to economic vibrancy.

Valuable Partnerships

When small business owners were faced with financial questions and loan applications, community bank partners served as a lifeline. The reality is that our economy and our society are based on relationships, and building upon these connections and relationships is how small businesses grow and succeed.

The premise of community banks is that the relationship between a customer and banker is a partnership rather than a transaction; this allows community banking institutions to be closely connected to individual and small business borrowers. It is because of these established personal relationships that small businesses have and will continue to work in lockstep with community banks, with confidence that both parties are mutually invested in each other’s future.

The premise of community banks is that the relationship between a customer and banker is a partnership rather than a transaction.

Because community banks serve a smaller pool of customers, they can focus on building that small-business banking relationship, personally tending to the needs of each client. From tellers to advisers and loan officers, everyone at a community bank is committed to the success of their clients’ businesses. 

In addition to continuing to serve small businesses, community banks are also positioned to partner with and give back to local communities, which further aids in the redevelopment of the Texas economy. Local community banks serve as the heart of many cities across the state and will continue to provide assistance and relief through nonprofit and other local organizations. When small businesses bank with local community banks, they are investing directly back into their local market, which benefits everyone in a city, county or region.

Proven Resiliency

Resiliency will be imperative for many small businesses hoping to reestablish themselves over the next several months. In the banking industry specifically, future success for many will be less dependent on liquidity and more dependent on the organization’s ability to absorb shock and remain resilient through uncertainty.

At community banks, decisions are made locally by financial experts who live, work, and play in the communities the community bank serves. That unique perspective means a request will most likely be made, or at least influenced by, someone who knows the customer or someone who may have worked with the customer already, resulting in quicker decisions.

Local community banks are frontline allies with small businesses across Texas, often working around the clock for clients. Between coaching customers through next steps, processing emergency-relief loans, and helping clients navigate online and virtual banking, community banks have created an established support system for small business owners, community leaders, mothers, fathers, students, and homeowners—people from all walks of life. This response has proven the capabilities of community banks to navigate uncertainty.

Digital Adaptation

In an increasingly digital world, many customers appreciate the ease that apps and websites provide in conducting business quickly and easily. While technology has become more helpful and convenient over the last several years, it has proven absolutely vital recently as most small businesses have been forced to communicate and conduct commerce virtually.

Small businesses also discovered that although online transactions can work well, during times of stress and uncertainty, customers value and rely on the human connection and relationship aspect more than ever. Community banks are in the unique position to provide the necessary technologies to keep customers safe, distanced, and healthy, while also being able to build upon established and trusted relationships with customers, which can create a sense of comfort and normalcy, even in these abnormal times.


As we emerge from the worst effects of the COVID-19 pandemic, local community banking institutions will continue to be a trusted resource for small businesses throughout the state. As small business owners adapt to meet the new and changing needs of customers, community banks will also adapt to the changing needs of their clients. By building partnerships, providing resiliency, and offering digital solutions paired with a personal connection, community banks will continue to support small businesses through these turbulent times.

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Dennis E. Nixon

Dennis E. Nixon

Dennis E. Nixon is CEO of International Bank of Commerce in Laredo, and chairman of the board of International Bancshares Corporation.

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