A business might choose a state bank over a national bank for several reasons, and among the options provided, the most relevant choice is:
The business works with a lot of local customers.
This is because state banks often have a better understanding of the local market, more personalized customer service, and may build stronger relationships with local businesses, which can be beneficial for networking and community engagement.
The other options are less relevant:
- Local banks are required to be FDIC insured: This applies to all banks, not just state banks.
- The business plans to expand into other regions: National banks might be a better fit for that, as they have a wider reach.
- Local banks usually have the lowest interest rates: This is not a guaranteed outcome, as interest rates can vary based on numerous factors.
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