The path to successful entrepreneurship is filled with adventures and challenges. As a small business owner, you will need to consider several tools to grow your business.
To keep your business afloat, you will need to manage your finances. One of the key ways to do that is by carefully considering what products and services a bank offers.
After all, if a bank doesn’t offer the products and services you need, you won’t be able to grow and develop your business. With the economy still struggling, banks provide the ultimate solutions and services on a range of products to help you stay on top of your game.
Here are a few services and features you should consider before choosing a bank.
Bank Loans
As a small business owner, you will need extra funding to expand your business. Banks usually refer to these loans as debt financing. Business loans are the most common source of funding a bank offers. Many banks provide long-term and short-term loans. Loans are available for a wide range of business purposes.
You can apply for funding for start-up costs, purchasing equipment, stock, and other operational activities that you might need. To qualify for a loan, you need to demonstrate that you can handle debt responsibly. Banks will usually look at your income, credit score, and debt-to-income ratio to determine if you qualify.
Account Minimum
Before you set up an account with a bank, check if it has any account minimum requirements. For example, a few banks charge a monthly service fee that you can waive by keeping a certain amount of money in your account.
The account minimum for small or online banks can be as low as zero to a few hundred dollars, and for larger banks, it could be thousands.
Rewards Programs
Several banks offer reward programs as an incentive to attract clients to utilize more services. A bank loyalty or reward program can vary from offering higher interest rates on your savings account to a discount on a loan, lower ATM fees, etc. Some rewards programs give you cash back as well.
Rewards programs have several benefits. Besides offering thousands as cash back, they also offer perks when you pay for your expenses through your business accounts. That’s why it is advisable to shop around for the best fit for your business when using a specific account to pay for a product or service.
Overdraft Protection
Business owners face important choices about their checking and credit accounts. If they do not have enough money to cover their purchases, they cannot use their cards to make purchases. That’s where overdraft protection comes in. An overdraft occurs when you don’t have enough money to make a payment or withdrawal.
Overdraft protection is a practical financial service that covers the amount of the transaction when you don’t have sufficient funds. The bank usually automatically moves the funds you have available in another linked account to the overdrawn account. The protection covers checks, ATM transactions, and debit card transactions.
Commercial Mortgage
Banks provide the bulk of commercial real estate loans to businesses. Commercial loans offer low-interest rates allowing business owners to get the money they need. Commercial mortgage loans usually vary from three to ten years, allowing businesses to pay back the money gradually as they slowly increase their profit.
It is important to check if your bank offers a commercial mortgage as it plays a crucial role in the growth of your business, especially if you need to expand in the future.
With the advent of the pandemic, many small business owners are still struggling and need financial assistance. That’s why small business owners need to familiarize themselves with the products and services offered by any bank they choose to cooperate with to see if it meets their expectations.
David Messiha | Staff Writer
