“If you don’t love the relationship you have with your banker, you need to get another banker.”
That was the advice from Alecia Karapita, commercial and account manager with the Royal Bank of Canada, to a meeting of Clearwater Chamber of Commerce on Sept. 10.
Bankers want to see the small businesses they deal with succeed, Karapita said.
“It all starts with your business plan,” she said. “Often you might have in your mind what you intend to do, but until you write it down on paper, you likely will not see a lot of success.”
A small business owner’s banker, along with his or her accountant and lawyer, are part of a team of professionals that the owner needs to educate about what his or her business is about.
“A lot of the time, we don’t understand your business,” Karapita said. “We want to understand where you’re going so we can help you achieve your goals. You need to have a good relationship with your banker so you can get good advice.”
Banks can advance money to businesses in a variety of ways: credit cards, lines of credit, term loans, leasing and government-guaranteed loans.
Each has advantages and disadvantages, depending on the circumstances.
Leasing new equipment, for example, can result in result in significant tax savings for some businesses.
Karapita encouraged business owners to learn more about how to leverage electronic banking to help their bottom line.
Once everything is set up, a business owner can do payroll with just the press of a button.
Bill payments can be done online, saving time and paper.
An online account can be set up so that certain people can do certain functions but not others.
One business owner asked about different rates and parameter for businesses located outside major centers.
Karapita said the bank bases its loans on business risk, not distance from major centers. It is done on a case-by-case basis, she said.