Basics

• Commercial banks primarily serve small and medium-sized businesses through loans, though many commercial banks have expanded to include loans and other financial services to consumers as well. In addition to loans, commercial banks provide savings and checking accounts, money market accounts and other financial vehicles to customers. Commercial banks rarely have walk-in facilities, instead relying on account representatives, or salespeople, to visit clients in their places of business. Commercial banks typically are more liquid than other financial institutions and pose less risk to investors because the commercial bank does not trade in risky investments. Most commercial banks are privately funded, for-profit companies. Deposits at commercial banks receive the same insurance coverage from the Federal Deposit Insurance Corporation (FDIC) as public-sector banks.
  
  

Additional Services

• Commercial banks often make their services available to customers and their families for personal banking needs. First Commercial Bank has set up a Certificate of Deposit (CD) program for high-wealth business owners to save up to $50 million in insured deposits with the bank. Commercial banks use financial planners for their clients to arrange business succession plans, estate planning and other family financial matters.
  
  

Merchant Services

• In addition to business loans, many commercial banks provide a variety of merchant services for their clients. For example, they will service a company's credit and debit card transactions, often for a lower fee than outside companies, when the client uses the bank for other services, such as deposits and loans. Commercial banks can provide leases for point-of-service transaction equipment along with leases for other business-related equipment.
  
  

Niche Markets

• Commercial banks such as Rockbridge Commercial Bank target niche markets such as medical, legal and accounting practices. They understand the financial needs and pressures of newly graduated legal and medical professionals and seek to begin a relationship with clients early in their careers by providing mortgage and continuing education loans. Through a longstanding relationship, the banks hope doctors and lawyers will turn to them for funding of new offices and medical facilities, payroll financing and expansion loans.
  
  

SBA Loans

• Many commercial banks, such as Commerce Bank, are designated as official Small Business Administrator (SBA) loan originators. They have the authority and the network of contacts and paperwork to receive SBA loan applications, approve and fund the agreements that are low-interest loans guaranteed by the federal government. SBA loans can be used to fund new buildings, equipment, payroll and other startup costs for a small business. Loans can be expedited through a commercial bank that has access to quick approvals and expedient processing avenues.