There is much to do when starting a new business. An important aspect of business is organising your finances. Your business banking needs will depend on your business’s individual circumstances and financial situation.
In this article, we have outlined some typical business banking products and services that most financial institutions provide.
All businesses need to have a bank account. There are two main types of bank accounts: transaction accounts and savings accounts.
Transaction accounts are a basic necessity of business banking. They can help with payments and receivables and better management of your cash flow. All businesses will need an account which can be accessed by cheque, ATM, EFTPOS, Direct Payments, telephone banking or internet banking, and into which you can add your takings, cash and other deposits.
Merchant facilities provide your customers with the option to pay by credit or debit card. A merchant facility can improve your cash flow, as your customers don’t require cash in their account to pay. Financial institutions offer a wide variety of payment options for you to offer your customers.
Merchant facilities are also available in 3 ways: actual terminal where customers can swipe their cards, mobile facilities which is useful if you are working in the fields and require a flexible payment solution so that you can accept credit card payments; the last one is Internet payment facilities which is useful both for online and offline businesses.
Whether your business is just starting up or is well-established, chances are you will need finance at some stage in your business life-cycle. There are two types of finance options offered by financial institutions: short-term finance and long-term finance.
Short-term finance can help you manage fluctuations in your cash flow. Some common products include business credit cards, overdrafts and fixed term business loans. Some banks offer Overdraft facilities that can provide the extra cash your business needs to cover those seasonal and unexpected expenses.
Long-term finance is used for funding investments such as a new business or equipment that expands the capacity of the business.
There are a number of factors you need to consider before applying for finance such as:
· how much do you need to borrow;
· what type of loan will you need;
· how long will you need it for;
· can the business afford to repay the loan,
· interest and any fees involved with the loan;
· what security can you offer the lender
Insurance is an essential part of running any business. Taking out the right insurance will help protect your business and minimise its exposure to risk. Your insurance requirements will vary according to the type of business you are operating, but you should be aware that some forms of insurance are compulsory, such as employees’ insurance, housing and auto insurance.
Financial institutions and insurance companies offer many different types of insurance cover. Speak to your bank regarding providing insurance for your business that includes property, theft, equipment, public liability and much more.
Banks are good starting point to get all the finance done
Banks are really good starting points to get all the business finance organized under one umbrella. Many business owners do not see the convenience in this, and end up dealing with multiple financial providers for their business financial needs. Another important benefit to be reminded is multiple product discounts, banks can sometimes provide more competitive insurance products if you are already their banking customer; sometimes they also provide better lending rate if you have long term banking history with them already.