Small Business Banking
|
Access to a full range of small business banking services is the foundation upon which new corporations are built. When individuals decide to go into business, one of the first stops on their way to entrepreneurial success should be a visit to the local banker. Aside from having a wealthy uncle with deep pockets, most new owners need a friend in the banking business that can help steer a fledgling enterprise into the profit margin. Establishing a relationship with local banking institutions is like a sailor trying to get his sea legs on a maiden voyage: if the sailor is going to stay aboard the ship, he needs to learn how to keep both feet firmly planted on deck. Likewise, novice entrepreneurs need the stability of small business banking and the long term relationships that can be cultivated to provide a measure of stability and financial security so necessary in today's volatile market.
A popular Bible quote states, "A man that hath friends must shew himself friendly: and there is a friend that sticketh closer than a brother" (Proverbs 18:24). And when it comes to cultivating friendships which lead to profitability and close associations with local companies, neighborhood bankers are keenly adept. Financial institutions know that in order to stay viable, they must depend on building relationships with small and large corporations; but small entrepreneurs are their bread and butter. A fledgling entrepreneur is likely a sole proprietor or owner in a partnership consisting of two to three individuals. Banks cater to companies that invest in the community and depend on local financing for new ventures, equipment, vehicles, facilities and payroll. Because the needs of sole proprietorships and Mom-and-Pop operations are so diverse, banks can build enduring relationships by providing a myriad of specialized services, from setting up lines of credit and asset management accounts to establishing checking and money market accounts and providing vehicle financing. And a good local lender can be the backbone of a startup company, providing counseling to help owners avoid the financial pitfalls that so many new entrepreneurs fall into. Formulating several small business banking relationships with local companies provides years of opportunities for banks to offer financial and consultant services not only to employers, but also to employees who may eventually become long standing customers.
Individuals who are new to corporate financing or owners who want to expand operations need the counsel and advice of bank loan officers and financial planners in securing operating capital, setting up accounts to handle future expansion, or developing retirement plans. Entrepreneurs just starting out will not only need small business banking services, such as a corporate checking account to transact day-to-day business, but also a separate account to handle payroll and long-term investment instruments, such as certificates of deposit, to put aside capital as a hedge against inflation or recession. Startups may require loans to purchase equipment, vehicles, and office machines, or to build or remodel a physical facility from which to operate. As the company grows, a local bank may help establish employer-provided retirement savings funds, such as Individual Retirement Accounts or 401(k)s for employees. And lines of credit enable new owners to purchase much needed equipment, tools, vehicles, or facilities without breaking the bank. Competitive interest rates and low payment plans can keep the company afloat while it is still in its infancy. Some banks offer low-rate loans with low payments for the first two to three years to allow businesses a chance to get established and higher payments as the enterprise realizes more profitability.
Sole proprietorships and partnerships can take advantage of small business banking services that give them the ability to operate like larger corporations without hefty fees. Most banks and financial institutions offer services and special accounts for lone entrepreneurs, Mom-and-Pop operations, and limited liability corporations that don't have a lot of capital, but still must compete with companies twice their size. Having access to small business banking options, such as corporate credit cards, lines of credit, web-based accounts, and check cards simplifies operating a new enterprise. All of these options help smaller corporations become financially stable and build consumer confidence that is so important in keeping a business viable. When customers feel confident about a company's fiscal stability, they tend to become loyal patrons and spread the word about the company's reputation, efficiency and ability to provide high quality products and service.
To apply for small business banking services, new entrepreneurs should visit the local bank and talk with a loan officer or president. To open a new corporate checking account, owners must have an Employer Identification Number, or EIN; articles of incorporation certified by the Secretary of State; and a current business license. Most banks require an initial deposit of at least $100 to open a checking account or regular passbook savings. Internet banking may also be an option for new accountholders; and officials will be able to set up electronic accounts. Owners can expect to pay a fee for ordering new checks and a corporate credit card account. Financial institutions which offer startup loans, operating capital, or lines of credit will want to see a business plan which clearly outlines company objectives and infrastructure and projects gross income and expenses over the next three to four years. Business owners who have operated a company for several years should have tax returns which demonstrate an ability to turn a profit. Banking officers will also want to review proposals for repaying loans based on projected earnings. When it comes to small business banking, proper planning is essential; but a local banker can easily become a new owner's best friend; and building a solid relationship is paramount to success.
|
|
|
|
