Most entrepreneurs use the bank where they maintain their personal accounts to start the borrowing process. But this could be a mistake. To get the right loan or credit line for your business at the best terms, it helps to research.
Irvine, CA (PRWEB) March 30, 2013
As the economy finally begins to emerge from its doldrums, both large and small banks are jumping back into the small business credit markets. This has led to a steady climb in small business loan approvals, as reported by Rohit Arora on FOX Small Business Center. As lending for small business continues to increase, Wertz & Company, an Irvine tax firm, believes that business owners should carefully evaluate their choice of banks before signing on the dotted line.
“Most entrepreneurs use the bank where they maintain their personal accounts to start the borrowing process,” says Russ Wertz, founder and CEO of Wertz & Company. “But this could be a mistake. To get the right loan or credit line for your business at the best terms, it helps to understand the different types of banks and who they prefer to lend to.”
Banks usually classify themselves as either a retail bank or a business bank. Retail banks cater to the general public, and specialize in providing bank accounts, credit cards, home equity loans, safe deposit boxes, and other individual banking services.
Business banks typically look to attract businesses of a certain type or size. They do this to meet their banking needs, which contain some retail banking products. But they generally place more emphasis on securing installment loans, business lines of credit, and commercial real estate loans. Business banks do handle the banking needs of individuals, but these individuals tend to be connected to a business that the bank has as a client.
As with any business, banks vary widely in terms of target market, specialty niches, size and type of clients, approach to customer service, and geographic locations. A good rule of thumb is to examine your company’s needs and values, and then research the banks in your area to see what they offer. This research should include everything from Internet searches, referrals from businesses similar to yours, and endorsements from professional advisors – such as your CPA firm – who regularly work with the banks in your geographic area.
Larger banks tend to offer less personalized service that is not relationship-based, and generally have higher turnover rates with their loan officers and staff. Smaller community banks usually offer more personalized service, but can be more expensive.
“Whomever you decide to bank with, plan on having all of your business needs taken care of at one bank,” advises Wertz. “This includes your line of credit and installment loans as well as checking accounts. In fact, many business banks will require this in order to do business with you. Take the time to do your research up front, and you will find the bank that’s right for you and your business.”
About Wertz & Company
Wertz & Company is an Irvine tax firm that specializes in working with entrepreneurs and business owners along their journey to success. The firm offers accounting, financial planning, estate and wealth management planning, tax preparation, and other management consulting services in a personal, proactive, responsive manner. With a strong commitment to the local community, Wertz & Company contributes to several different charitable endeavors. For more information, visit http://www.wertzco.com.