Did you know that 82% of businesses fail because of cash flow problems? That’s right; not because of management issues or unfair laws, but stalled cash flows. In times of financial turmoil, only a reputable bank can get your business out of the doldrums. It’s unfortunate that most business owners don’t quite understand the importance of having a reputable bank as a partner. In fact, about 26% of small business owners don’t have separate accounts for their business. This begs the question, is partnering with a bank really good for business growth and prosperity?
To answer this question, we’ll be highlighting a few ways teaming up with the right bank can take your business to greater heights.
1. The Right Banks Enhance Your Professional Image
Having the right bank as your partner helps enhance your corporate image. Investors associate specific banks with high-level and successful businesses. Partnering with such banks will automatically put you in the big leagues, or at least give off the perception.
What’s more, a separate business account is a clear indicator that you’re open for business. Failing to separate your business from personal affairs is a huge turn-off for clients and investors. Not only is it unprofessional, but also makes your business look illegitimate or temporary.
Having your business name on checks and financial statements shows that you’re here to stay. Avoid giving off the wrong impression by using your personal account for business transactions.
2. It Offers Commercial Loans
Unexpected financial emergencies or shortfalls are common in all businesses. As mentioned above, this is what brings most businesses to ruin. Thankfully, banks offer business loans that can help businesses fill in financial gaps.
You can use business loans to buy equipment, pay suppliers, or even fulfil payroll. You can even use the loan to buy real estate property and expand your business. Commercial banks will be more than happy to give you a loan provided you meet their qualification criteria.
Small businesses are the biggest winners because of small business loans from the government. The United States Small Business Administration has developed various loan programs for small businesses. They can access these loans through commercial banks and get the funding they need.
The SBA guarantees these loans, meaning that businesses with less than stellar credit scores can apply for these loans. However, the first step is to partner with a commercial bank to get the green light.
3. It Keeps Your Money Safe
The biggest benefit of partnering with a reputable bank for your business is that they offer a safe place to store your business cash. Banks offer both checking and operating accounts for your business.
A checking account will hold money that your business will use for completing payroll and paying payroll taxes. An operating account, on the other hand, holds money that finances the business’s daily operations. This may include paying suppliers, rent, or energy bills.
These different types of accounts help you manage business finances in check. It also keeps your money safe from theft or fraudulent transactions.
4. Banks Offer Lines of Credit
Sometimes your business needs financial help, but taking out a large loan means paying hefty interest and other fees. If you want to sidestep interest, you should consider opening a line of credit. A line of credit allows you to borrow a specific amount and repay it when you get payment from your client.
Let’s say you have a line of credit of 10,000 pounds. The bank allows you to withdraw any amount not exceeding 10,000 pounds. You then pay back the amount when your business receives payments for pending bills.
Lines of credit allow you to borrow only the amount you need, not a large loan that attracts hefty interest fees. Over time, you can save a bundle in interest fees; money that you can use to grow your business.
5. They Provide Debit and Credit Cards
Did you know that commercial banks offer debit and credit cards for businesses? That’s right, businesses can apply for debit and credit cards with their checking or operating accounts. You can use this credit card just like you would your personal one.
A business credit card can help you manage short-term expenses and keep your business running. It also helps you manage costs, spread cash flow, and make timely payments. The best part is that it comes with incredible rewards to help save you money.
However, it’s worth noting that business credit cards are only for business use. Using it for personal reasons violates the terms that the banks stipulate. This could result in dire consequences for your business account.
6. They Offer Priceless Advice
All business owners face the monumental task of managing their business’s finances. However, this is easier said than done, given the unpredictable nature of business. Banks can step in to give business owners valuable advice on how they can maintain cash flow and boost their profits.
The right bank can offer crucial advice on taxes, insurance, payroll management, and even retirement accounts. If you partner with the best bank, you can get insights into business growth strategies to take your business to the next level.
They will also help you set up digital payment methods that are automatically reflected in your business account. This will help streamline payments and ensure consistency between transactions and your bank account.
7. They Offer Workshops and Seminars
Banks frequently hold seminars and workshops where business owners can learn about money management and growth in their industries. They also learn about solid financial strategies and how to expand their networks. These events are a great avenue to learn and grow your business for increased profitability.
Bank Partnerships for Accelerated Business Growth
Partnering with a reputable bank is one sure-fire way to spur business growth and increase profit margins. However, you need to find a trustworthy bank that aligns with your goals and vision. Open a business bank account today and propel your business to greater heights.
Check out our wealth management section to learn how you can make good use of the profits you earn from your business.