COSTA MESA, Calif.–Strong response by banks to the Paycheck Protection Program (PPP) has driven record-high satisfaction among small business customers, according to J.D. Power, which noted dedicated account managers “make a difference.”
“After getting off to a wobbly start in the earliest days of the pandemic, the nation’s banks nailed their response to the U.S. Small Business Association’s Paycheck Protection Program (PPP), managing to administer $669 billion in relief loans to small businesses and—importantly—oversee the forgiveness of more than 1.1 million of those loans,” J.D. Power said in releasing the 2021 U.S. Small Business Banking Satisfaction Study.
The Key Findings
Among the key findings, according to J.D. Power:
- PPP delivers big boost to small business banking customer satisfaction. Overall customer satisfaction scores for small businesses that applied for PPP loans with their primary bank are 853 (on a 1,000-point scale), which is 32 points higher than customers that did not apply for a PPP loan, J.D. Power reported. Satisfaction climbs to 869 among small businesses that completed the process of PPP loan forgiveness.
- Just more than half of small businesses are financially healthy. Despite improvements in the economy and an improved business outlook, only 52% of businesses are financially healthy, meaning they are financially stable and have access to capital/credit required to meet business needs. The rest fall into either the financially stressed (26%) or financially vulnerable (23%) categories. Another 28% of small business owners say COVID-19 continues to have a severe or major effect on their business, according to J.D. Power.
- National banks outperform regional banks in customer satisfaction. Overall small business customer satisfaction with national banks is 829, which is 13 points higher than the average overall satisfaction score for regional banks. National bank customers also are more likely to say that their PPP loan forgiveness process was easier, J.D. Power said.
- Account managers make a difference. Small business banking customer satisfaction is significantly higher when a dedicated account manager is assigned to the business. The average satisfaction score for small business banking customers with an account manager is 859, which is 73 points higher than small businesses without an assigned account manager, the survey found.
Study Rankings
According to J.D. Power, findings related to specific institutions included:
- Bank of America ranks highest in the Midwest region with a score of 859, followed by PNC Bank (839) and Huntington (835).
- Chase ranks highest in the Northeast region with a score of 839. Bank of America (830) and TD Bank (830) rank second in a tie.
- TD Bank ranks highest in the South region with a score of 865. Chase (861) ranks second and Wells Fargo (843) ranks third.
- In the West region, Bank of the West and Chase rank highest in a tie, each with a score of 829. This is the ninth consecutive year that Chase ranks highest in the West region. U.S. Bank (825) ranks third.
Feeling Good
“Small business owners are feeling good about their banks and more confident about the economy, but just more than half of small businesses are financially healthy,” said Paul McAdam, senior director of banking and payments intelligence at J.D. Power.
The 2021 U.S. Small Business Banking Satisfaction Study includes responses from 7,327 small business owners or financial decision-makers at small businesses that use business banking services. The study was fielded from June through August 2021.
For more on the U.S. Small Business Banking Satisfaction Study, go here.