One Size Fits for Life

by Elizabeth Sherman 26. September 2012

Is Your Business in the Right Checking Account?

Recently, I got a call from a potential new customer inquiring about our business checking accounts. These calls always get my blood pumping with the anticipation that the business on the other end of the line will need every service I can offer. It can be very exciting!

In this case, the business was a startup and not expected to carry very high balances for the first year. In an attempt to put this business in the right account, I asked a few questions. How many deposits will you make each month? How many checks will you write each month? What is the anticipated average balance each month? Based on the answers, I was able to suggest an account that mirrored the needs of the customer. Okay – end of story, right?

WRONG!

The type of account that may work during the infancy stages of a business will most likely be detrimental to the business as it grows. With any luck, as the business grows, so will the volume of transactions processed through the account. It is for this reason that banks offer a multitude of business accounts. Each account offers something different, whether it’s a higher number of transactions allowed or a higher balance requirement.

It is imperative that you, as the business owner, keep an eye on your account and assess the activity that flows through the account. If you suddenly start to see service fees where there were none the month before, look at the volume of transactions. Has it increased dramatically over the months? If so, touch base with your banker to find out what options you have to upgrade to an account that will fit your growing business. The most basic business account that initially appears to be the best value could end up costing you a bundle in fees.

As a Business Banker, it is my job to sell business products, but more importantly, to bring in new business and help business owners navigate through the product jungle we call banking. I can suggest every product under the sun, but if it isn’t a good fit, I won’t have that business for long.

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by Elizabeth Sherman 5. July 2012

Lending There have been many articles written on the topic of the “Personal Guarantee” as it relates to commercial loans.  Traditionally, when a business owner comes to a bank requesting a commercial loan, one of the requirements is the owner’s Personal Guarantee.  In a nutshell, the bank wants the owner’s promise that if the business fails to generate enough income to repay the loan, the owner(s) will step up and make sure the obligation is satisfied. 

This requirement is often a sticking point in the negotiation process.  Business owners are reluctant to put their personal assets on the line and banks are reluctant to provide financing when it appears the business owner doesn’t fully stand behind his/her business. 

In some cases, the Personal Guarantee may not be required.  If the business has been around for a long time with documented financial strength or if there is a significant banking relationship already established, the bank may forgo the Personal Guarantee.  For small businesses that have only been around for a short period of time or have a history of financial ups and downs, banks will, in all likelihood, require the business owner(s) to sign a Personal Guarantee.  

This document is a promise to repay the company’s debt and to insure the bank’s interests are protected.  There are no liens filed and no collateral pledged. 

However, if the business income cannot support the debt, or the business goes under, the owner(s) need to be prepared to utilize personal assets to repay the loan.    

Banks want to help you.  We want to see your business succeed.  We also want the same commitment from you that you expect from us.  We believe in you and your business. 

Do you?

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by Elizabeth Sherman 8. May 2012

If someone asked, "How much money do you have in your account?” would you know the answer – down to the penny?  Do you rely on an ATM receipt for your latest balance information or your monthly statement for transaction history?

In this era of technological advances, you can access account information from your phone, electronic tablet or computer.  The problem?  Hackers can as well.  By simply opening an e-mail, you can inadvertently download an insidious virus which could enable a criminal to see all of your confidential information.  While banks are putting more security features in place to protect your accounts and related information, YOU still remain the first line of defense.

You should know what’s going on with your bank account better than anyone.  Only you know where you’ve been and where you’ve spent your money.  Take five minutes each day to verify your transactions and balances.  By doing this every day you could potentially mitigate damages caused by either theft or the manipulation of your accounts.

It’s your money!  Make it your business to know where it is at all times!!!!!

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