BofA the latest big bank to woo small-business customers
After scaling back on lending to small businesses after the financial crisis, megabanks are making big moves to win their business back.
Bank of America on Monday became the latest bank to do so, launching a rewards program for small-business owners with a range of benefits, from higher savings rates to discounts on certain types of loans.
The Business Advantage Relationship Rewards program provides small businesses with a suite of rewards based on their combined deposit and investment balances.
For instance, customers that maintain a three-month average balance of at least $100,000 qualify for “platinum honors,” which include fee waivers on standard banking services, a 0.75% interest rate discount on certain business loans and a 75% bonus on credit card rewards.
The program also features two lower tiers with smaller rewards: “platinum” for businesses with between $50,000 and $100,000; and “gold” for those with between $20,000 and $50,000.
The launch comes weeks after Bloomberg News reported that JPMorgan Chase was in talks with Amazon to launch a cobranded card for small businesses. The card would likely feature rewards points for purchases, and may eventually include other add-on products, such as business insurance, according to the report.
Online lenders and other nonbanks are active in small-business lending, too. Amazon has a small-business lending program, and, according to a CNBC report last month, it partnered with Bank of America's Merrill Lynch unit to provide loans to merchants. Both companies declined to comment on the story at the time.
Other partnerships and new products offerings have surfaced in recent years. JPMorgan expanded its online lending agreement with OnDeck Capital last year, Wells Fargo in 2016 introduced its FastFlex program to compete with online lenders, and American Express expanded into merchant financing, working capital and other small-business products.
In designing its new small-business rewards program, BofA in many ways replicated its loyalty program for affluent individuals. That program, known as Preferred Rewards, offers also offers three tiers of benefits for customers with combined balances of at least $20,000.
BofA launched the Preferred Rewards program in 2014. It says that since then it has enrolled more than 4 million retail customers with total assets of $384 billion.