Is Your Business Bank Bankable?

Are you happy with your bank? Do you consider what you pay in fees to be a good value for the services received? Do you consider your bank to be a source of support for your business? If the answer to any of these question is “no” or “maybe,” read on. The choice of a bank is a serious decision in our personal and business lives and size matters, whether you maintain a business or personal account with the bank.

The expected needs of the individual or the business must be considered when choices are made. Banks have become both expensive and competitive over the past couple of decades and you owe it to yourself to get your needs met in exchange for the favor of allowing the bank to hold your money and collect the fees you pay for that convenience.

In your personal life, you will want to buy or refinance a home, make home repairs and upgrades, or finance your child’s education. As a business owner or Solopreneur consultant, you may have equipment or technology upgrades to finance, or growth and expansion plans that will require outside financing. Whatever your financial plans, a helpful banker will provide crucial advice and facilitate access to capital, so that you will realize your goals and fulfill your obligations.

How should Solopreneurs and business owners choose a bank? A good way to start is to identify two community banks, two regional and two large national outfits and pay each a visit. Walk in and ask to meet the business banker, who is also usually the commercial loan officer. If you need an appointment, make one, so that you will have time to talk. Tell this individual about your business, about plans you have on the drawing board and your projected banking services and/or financial needs. How can the bank augment and support your plans? What insights and suggestions does the banker offer you?

If business credit is a priority, ask these three questions:

What is the amount of the credit line that the business banker can personally approve?
Does the bank offer SBA loans and is it a Preferred SBA Lender and able to approve and underwrite such loans independently?
How much SBA loan business is done and what percentage of applications are approved?
Below are general guidelines to consider as you re-think the banking needs of your business venture. Remember to ask about merchant credit card processing fees for both in person, online and mobile transactions if you accept debit and credit cards.
Community banks

Appropriate for Solopreneurs and small or medium size businesses
Fees can be high as compared to larger banks
Online or mobile banking technology might be slow or not comprehensive
Service is typically excellent. This is old-fashioned banking. Customers are taken care of. The tellers and managers know you.
Loan decisions are made locally. The loan officer knows you and your business. S/he want to help. Your character will count.
Regional banks
Appropriate for small to medium size businesses that plan to grow
Fees are about average
Online and mobile banking technology will meet expectations, the basics will be available
Service is usually good, the regionals are capable of delivering personalized service
Loan decisions will be made with an eye to the local economy, along with what your financial statements indicate about your ability to repay
National banks
Appropriate for medium to large businesses that do out-of-state and/or international business
Fees are usually the lowest available, the result of economies of scale
Online and mobile banking technology will be the most cutting-edge available and banking can be almost entirely done online
Service is often impersonal because staff turn-over is often high. No one knows you for long. Decisions are not made locally at the branch level.
Loans are issued strictly by the numbers, the manager will not be able to give you the benefit of the doubt.

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