Your business had a storybook beginning. It started as an idea on a cocktail napkin. World headquarters was the garage at home. And office hours were before sunrise to well past bedtime.
Now, your company is taking off. Sales are steadily growing. You’re adding employees, scouting for new office space and keeping the same office hours. You’re starting the next chapter of your company’s story, and that’s exactly when you should ask: Is my financial services provider on the same page, or is it still serving the needs of a start-up? And how do I know when I need more?
If you have a great relationship with your business banker, you may know the answers already because your banker is asking you the right questions. Yet, business owners should know the signs that show their business banking needs are changing and growing. Think about these indicators:
Credit needs. As your company’s credit needs become more complex, you should have more than an annual review with your banker. For many businesses, when credit requirements approach or exceed $100,000, it’s important to work with a financial services company that offers a full array of services and options for business owners.
For the growing business, credit lines and loans can be used to expand your location, purchase inventory and finance receivables.
In the beginning, a basic revolving line of credit or term loan can meet your requirements. Yet with rapid growth and significant working capital needs, your business might benefit from customized solutions, such as specialized equipment lending and leasing.
Deposit relationship. When your company’s deposits reach thousands of dollars, and especially when those deposits reach $100,000, you should have ongoing treasury management. This would include reports that detail balances, trends and activity for all of your accounts, as well as prevent fraud.
Your business banker should also offer recommendations for actively managing your account, such as an overnight sweep service that routinely moves funds from your checking account into a higher interest-earning account.
New Construction. When your business is ready to build or expand an office or plant, it’s one more signal that you are beginning the next stage. Make sure your business banker is providing all financing options, including SBA loans that feature a 10 percent down payment.
Full-service support. If your financial services needs are handled by more than one provider today, it’s a good time to consider bringing all of your business to one financial services company. As your company grows, a full-service provider can offer convenience and it’s likely you’ll earn discounts and savings.
What’s more, as you grow, you’ll want a business banker who can access a full array of resources to help your business. Hiring more employees? Check to see if your provider has payroll services, and benefits and retirement plan consultants to assist.
Looking to expand payment options for customers? Your provider should offer merchant card services. Are you ready to buy supplies or do business overseas? You need a business banker who can take care of issuing trade bank letters of credit to make it possible.
Talk to your banker
The best way to know if you need more is to talk with your banker. Many new businesses miss opportunities to rise above start-up status because they don’t get the help they need.
Some don’t take the time to develop and share business plans with a banker when they need access to capital. Others operate their business from a personal account instead of a business account — using up personal credit and home equity instead of building a credit history for their business.
Business is a team sport, and a full-service business banker should be in every company’s line-up. The right financial services provider can be the key to helping your business reach the next stage in its journey to success.
Tawnie Nelson in Vancouver leads Wells Fargo’s Business Banking Group for Southwest Washington. She can be reached at 360-759-4820 or tawnie.nelson@wellsfargo.com.
