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"Where should I do my business banking?"

published at: November 13th, 2020

One of the most frequently asked questions I receive is “where should I have my business bank accounts?"

To me the answer is very simple, “bank where you’re treated best.”

This is 100% case by case depending on many things ... industry type, annual sales, sales cycle, average deposit balances, average transaction count per month, complexity of the business needs, sophistication of the banks online platform, etc. etc. etc.

What most business owners dont know is that longevity of a business relationship doesn't hold as much we as it once did. I hate to say this but your relationship with the teller who makes your depsoit for you every Friday isn't going to help you when you need funding from your bank. Today banks and lenders are looking for positive cashflow as the fisrt form of repayment in an industry they are comfortable with at that moment in time. This means that as economies and industries change so will a bank's appetite. For exmaple, a bank who was once agressively lending to manufacturers or the medical industry could shift away from those industries once they are over leveraged while loosening their credit criteria for the next industry they want to focus on. Have you ever seen a promo that reads something like, "1.99% on new euipment purchases?" This is because that bank may have realized that are perhaps overleveraged in unsecured debt and light on their balance sheet of equipment debt and want to make a push to capture new equipment or secured debt to balance out the risk of their book of business. It really is that case by case.

At the end of the day any bank can hold your deposits and greet you when you walk in but who is going to be there for you when you need more than warm smile and a lollipop? I believe you should bank where you are treated best while knowing that there may be a better banking relationship right around the corner.

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