Money Matters - Autumn 2007

Banking the benefits

Photo: man at computerYour bank is a supplier of services to your business in much the same way as any other supplier, and their services and charges can differ widely.

It is a good idea to review your current banking arrangements annually, as well as your future banking requirements. Changing the products and services you use, or your provider, could deliver significant benefits to your business.

How you judge the service you get will largely depend on the services you actually need. For many businesses, their bank is a crucial source of financial support. So the terms on which it is prepared to advance money will be a key issue. It is not just a question of the rate of interest your bank charges you, but also how much it is prepared to lend, the security it requires and the flexibility with which it approaches your request.

Some banks have dedicated units to cater for the needs of specific industries. This can be important if you require specialist types of finance.

Other aspects of a bank’s services may be more important to you, such as cash handling, foreign exchange dealing, or the amount of interest payable on deposits. In this case, it should be relatively easy to choose between providers.

Once you know what you are looking for, the internet offers a number of free calculators and tools that enable you to make easy comparisons between the main banks and other lenders. You may be surprised at the savings you can make.

Also, consider that a competitor provider may appreciate you more since they will come to you fresh and see your business for what it is now, rather than what it might have been several years ago. It is therefore worth shopping around.