Sign & Digital Graphics

November '15

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S I G N & D I G I T A L G R A P H I C S • November 2015 • 27 • Character—the highly subjective evaluation of the business owner's per- sonal history • Capacity—an evaluation of the company's ability to repay the loan • Collateral—business assets that can be sold if a borrower fails to repay the loan • Conditions—an overall evaluation of the general economic climate and the purpose of the loan, and • Capital—the business owner must have her own funds invested in the com- pany before a financial institution will be willing to risk any of theirs. Nowhere else than choosing a busi- ness bank does age-old adage "People buy from people who they like, trust, and with whom it is convenient to do busi- ness" hold true. Once you've established a relationship with a banker, meet with him or her at least once a year and offer an update on your company's finances. Even so, it's a good idea to interview branch employees and managers at com- peting lenders every few years and gauge their willingness to devote time to a sin- gle businessperson. Although switching banks can be a hassle, you ought to let your banker know you aren't afraid of "shopping around"—it keeps them on their toes. Fine-Tuning the Quest Prior to doing the research for this column, I had little idea about what I, as a business owner, should look for and insist upon before settling on my busi- ness banking partner. Here is a good list of things to ask a bank candidate: Hours of operation and acces- sibility—Today's bank branches are rapidly evolving into resolution centers rather than the venue for mak- ing basic bank transactions—such as deposits and withdrawals. Most busi- ness owners work during weekday hours, so look for the flexibility to be able to deposit money late in the evening and weekends, or via mobile apps. Still, look for a bank that has a good number of branches nearby and has generous business hours. Funds availability—When you make a deposit, how long does it take to post to your account and become available? Banks range from same day to three days, so this is an excellent ques- tion to ask. Monthly transaction limits, minimum balances and fees— Most banks are going to offer you a suite of business tools—like free checking, online bill pay, QuickBooks compat- ibility, free credit cards and others. The only way to differentiate between banks will be the fees and conditions. Consider the number of transactions, checks and transfers you are going to have on a regular basis. Run those scenarios by each prospective bank and evaluate the fees you are likely to incur. I've seen lim- its on number of monthly transactions range from 50 to 300 without additional costs in the banks I've researched. Ask each one this question and gauge their response: "If my banking needs remain unchanged in foreseeable future, will I be grandfathered in at these minimum balances and fees? I don't want my costs to go up if my needs don't change. Of course, if the bank wants to lower my minimum balance or fees, I'm all ears." ATM fees—Although the banks I researched offer debit cards, only a handful of banks offered free use of their card on other bank ATMs and fewer still offered refunds on the fees those other banks charge for using their ATM. I don't use an ATM a lot with my busi- ness, but it's nice to know that when I do, I'm covered. Personality and expertise of bank staff—As a business bank client, you'll be dealing with the tellers and bank manager a lot more than the average banking customer. Make sure they're the type of people with whom you prefer to work. You can easily judge bank employee morale by the way they serve you. And, accurately predict how well the bank will treat you as a client going forward. Try asking yourself some of these questions: • Am I readily recognized as a valued customer of my bank when I enter the branch or do I have to show my ID to a familiar teller every time? • Does the person assigned to your account routinely travel to their clients' place of business, or is it customary that all business meetings and consultations be conducted at the bank branch? • How long has the loan officer been with the bank? What is her expertise and 1 2 3 4 5

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