Business Services - Banking and Finance
There are several approaches to doing business in modern America. You can find examples pro and con for each, and your specific needs should be the determining factor.
I’m talking money.
As a business, you can leverage yourself to the hilt. You can refuse to incur debt. Or any degree of financing in between these extremes.
In order to function in business, though, you will need banking and financial relationships, even if you choose not to incur debt. You will be surprised at how much money you can save for the bottom line by astute use of these relationships.
Banks have this whole bi-polar thing going on with their approaches to business. The longer that you deal with banks, the more you will come to recognize this fact. Banks want your business except when they don’t want your business. It’s some sort of cyclical thing governed by the orbit of Ceres or something. I cannot explain it any other way.
On any given day, any given bank whether large or small may be receptive to doing business with you. This is no guarantee that in weeks, months or years that policy won’t change. Banks have a lot of ways to make money that do not involve doing business with you. You, on the other hand, have to have a bank if for no other reason than as a place to keep your cash.
A bank that wants your business may agree to just about anything. No fee checking. Lines of credit that are not asset based. Term loans at or below prime. Everything that a bank does for you and all the charges that they may normally charge are negotiable.
The beauty of America today is that your bank does not have to be down the street. It can be in another city or another state. Your bank may have offices worldwide or just one office in a small town in Idaho. The Internet, telephone, fax and the Federal Reserve system make this possible.
Here’s a short list of things to negotiate with your bank right up front.
- Float. Your bank controls how long it takes for deposits to be credited to your account. There are banks that will give you immediate credit, or next day credit. You don’t have to settle for 2-3 days or longer.
- Fees. Your bank has a list of fees that are all negotiable. A fee for each check that is deposited? A fee for each check you write that clears? Nope and nope. In fact, the only fee I accept these days is the NSF check fee, because I’m going to collect that plus my charge from the guy that wrote the bad check.
- Compensating balance. You can always get a lower one or even do without. Put up a fight and see how low you can go.
- Web access. A must. Most banks have it. It should be free of charge. It should also allow statement downloads that will make your bank account reconciliations much easier. You can do your own stop payments on line, obtain check copies and transfer funds between accounts. Ask to see their product demo. If it sucks, think about another bank.
- Interest. You should get a reward for a cash balance.
- Hours. Your bank can be open whatever hours it chooses. There’s no law about “banker’s hours”. Look for one open late, into the evenings at least one day a week and open on Saturdays.
I’ll address credit issues in the next post. For now, remember that your costs to have a banking relationship can be minimal, even zero, if you shop around. You’re the customer. If they don’t want you, another bank will.
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