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Your banking relationship is one of the most important aspects of operating your business. The right banking decision affects many details of daily operations. Can you obtain a business loan? Will you be covered for an occasional overdraft? How long will deposited checks be held until the funds are available for use? When choosing a bank, be
sure your choice institution supplies all necessary services. Here are several things to consider: ·
Business checking accounts ·
Commercial loans and lines of credit ·
Merchant MasterCard/Visa/Discover ·
Merchant American Express (American Express normally charges an
extra 1 percent to instantly credit deposits.) ·
Night depository ·
Appropriately formatted monthly bank statement ·
Commercial transactions window ·
Federal tax payments accepted ·
Commercial banking department Once you find a bank that
suits your needs for both the present and the future, compare fees and
services. Don’t base your decision
strictly on information provided by the banks; ask other business people for
their opinions. Accentuate the positive When you are shopping
around and when you open your account it’s important not to immediately ask
about the bank’s overdraft policy and charges — it sends a negative signal. If
you don’t overdraw your account, why would you want to know the policy? Despite
the high overdraft charges, banks don’t make money on accounts that overdraw so
they will be leery of someone interested about overdrafts at the outset. Instead of worrying about
overdrafts, use that energy to maintain a positive balance in your checkbook.
Besides the cost of bank overdraft charges and charges by the payee and its
bank, bounced checks damage your reputation and could affect how your business
is run in the future. Some suppliers might subsequently require bank drafts or
cash; some might require payment on delivery, rather than monthly billing; and
some might shut you off completely. How
you handle your checking account is given serious consideration when you apply
for a loan. Are you frequently overdrawn? Are you barely keeping a positive
balance? Or, do you have enough in your account to cover emergencies or errors? Mistakes do happen, so if
you know your account is going to be short, call the bank manager and explain that
you made an error and think you might be overdrawn. Ask if there is any way to
cover until you can make it in with a deposit that day or the next. Explain
that it rarely happens, but if it should re-occur, request to be contacted so
you can rush down with a deposit before the check is returned. You also can ask
your banker to reverse the overdraft charge.
The answer may be “no,” but it doesn’t hurt to ask. If your business works in cycles and you
tend not to make regular deposits, it can be a good idea to keep an extra
account at the bank in case you need to cover an overdraft. If there is a
shortfall, you can ask the bank to transfer money to the deficient account. Ask
if this can be set up to be done automatically or at least manually by the bank without having to
call you each time. Put people first Once your account is
open, you and your employees should get to know the bank’s staff. For those in
areas with branch banking, use the same branch regularly. Open your account at the branch you will be
using, and try to use one with a loan officer. Be friendly with everyone
— tellers, customer service reps, assistant managers, the manager, loan
officers, and even the guard. Don’t overdo the friendliness, just be natural.
Try to speak to everyone whenever you are in the bank, and remember to use
people’s names. Be sure to thank the tellers or customer service reps even in
cases when they should be thanking you. Use the commercial transaction window
so the manager will remember you as a business customer. Commercial loans are
where a bank makes the most money, so every business is a prospect. Teller is the entry position for the banking
industry, so turnover rates are high. Many times tellers move on to other positions
in the bank, so you can’t have too many friends. But, don’t expect the new
tellers to immediately know you. If asked for identification, pleasantly show
your driver’s license. Remember that the tellers are only doing their jobs by
asking even long-time customers for identification. They are responsible for
protecting the bank and you by ensuring that whomever receives the cash is the
right person. If you take time to
remember names and faces, and acknowledge good service, bank employees will
tend to remember you. When a bank employee is especially helpful or just
generally good, write a letter to the manager so it can go in the employee’s
file. If it’s the manager whom you want to praise, find out his or her boss’s
name and address and write to that person. Community action Bankers are almost always
active in local business and community groups, so if you are new to the
community, ask your bank manager to sponsor you for membership in a particular
organization. Or turn the tables and offer to sponsor membership if your banker
is not part of a particular group. If you hear of new businesses coming to the
area, inform your banker. They are also in business and will appreciate the
leads. It’s worth the time and
effort to develop a good relationship with your bank. If you take the time,
ultimately they will too. |