How to Make Business Banking Work for You

How to Make Business Banking Work for You

Lorraine Romano, AVP Business Banking

Owning a business is a dream shared by millions of Americans. Whatever your special skill – cooking, hospitality, styling hair or arranging flowers – you’ve probably dreamed of owning a restaurant, inn, salon or florist shop of your own, answering to nobody and being your own boss. But the dream of small business ownership can be notoriously difficult to attain.

Even if you’re able to save up enough money to open a business – and that’s a heroic budgeting feat in this day and age – you face difficult odds. One in five small businesses fail within their first year, while half fail within five years.1 There are many factors that contribute toward business failure or success, but ensuring you’re doing the right thing when it comes to business banking – and being aware of all the resources at your disposal from your financial institution – is key to weathering those tough early years. So, if you’re starting a business for the first time, what do you have to consider?

Person holding business paper

Understand your financial needs
Before you go to your financial institution for a business loan or other products or services, you should first know precisely how much money you’ll need to get off the ground. There's more to a business than furnishings and office space. Especially in the early stages, startup costs require careful planning and meticulous accounting. Pre-opening startup costs include a business plan, research expenses, borrowing costs, insurance, license and permit fees and expenses for technology. Post-opening startup costs include advertising, promotion and employee expenses. You’ll need to be prepared for all these expenses to arise, whether sooner or later.

Get your house in order
To qualify for a business loan, you’ll need to ensure your paperwork is in order and your financial state is totally transparent. Make sure you meticulously record your expenses – whether future or current – as well as the income you make (if you’ve already begun operating). (Beyond securing a loan to fund your startup and early growth costs, this is good practice for when you must file your taxes!)

Figure out which business loan is best for you
After you perform a thorough evaluation of how much money you’ll need and you have all the financial information an institution will require, go to your bank or credit union to find out which loan is best suited to your needs. At Affinity, we offer various types of business loans, including:

Which of these is best for your business is something you’ll need to decide, but if you’re an Affinity member, you don’t have to do it alone. You can fill out an online form to request help from a Business Specialist at any time. We will help you understand the details of each type of loan and whether they serve your requirements as you’re getting your business started.

Beyond loans: Reaping the full benefits of business banking
Though getting the right business loan is one of the biggest hurdles, you should be sure to take full advantage of whatever resources your financial institution has to offer. Affinity’s Business Solutions include business checking and savings accounts with no minimum balances and competitive interest rates, respectively. As your business grows, Affinity can also help with various other key financial areas, including:

    • Merchant solutions
    • Payroll services
    • Retirement programs
    • Investment programs
    • Business insurance

This full suite of services allows you to come back again and again to the same financial institution. If you’re not an Affinity member, be sure to ask about what your own bank or credit union has to offer, and don’t forget to utilize financial advisors to help walk you through the beginning stages of business ownership.
Starting a business can be difficult or even scary, but if you get a good idea of what you need financially, you can successfully launch the enterprise of your dreams. But most importantly, you need an institution with the full range of business banking services, and professionals you can get to know and trust.

                                                   

This information is for informational purposes only and is intended to provide general guidance and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition are made.  

1 Retrieved from https://www.fundera.com/blog/what-percentage-of-small-businesses-fail