How small business firms select a bank: Comparisons between the United States and Australia

Abstract

This paper compares the factors that small business firms in the United States and Australia consider when selecting a banking partner. The results show that small firms in both countries ranked the bank's willingness to accommodate their credit needs as being important. However, US firms consider the range of products and services, convenient location, financial health and personal relationships as being more important. Australian firms, on the other hand, place greater emphasis on long-term relationships, day-to-day efficiency and competitive prices. Since most of these differences can be explained as a result of differences in banking industry structures, the study may have marketing implications for banks that serve small business customers in the USA and other parts of the world.