Small business owners still remain concerned about access to capital and making sure that they have access to the best solutions for improving their cash flow and finances.
So what specific financial solutions can truly help small businesses throughout the state grow and prosper?
Smart Business spoke with California Bank & Trust Executive Vice President Betty Rengifo Uribe about ways small business owners can leverage some helpful financial solutions to save money and streamline operations.
What specific types of financial solutions should small business owners be considering right now?
There are several different solutions that many business owners can use to improve their finances.
Since access to capital is still a critical issue for many small business owners, entrepreneurs should consider a wide range of solutions, including loans, lines of credit, leases and, perhaps most importantly, Small Business Administration (SBA) loans that may offer very favorable rates and terms.
Beyond that, any solution that can help grow revenues and streamline operations is worth a further look. Some of the most useful include: merchant services, business credit cards and remote deposit.
How can small businesses use merchant services to their best advantage?
Any business, large or small, should be offering customers as many payment options as possible. With the right merchant services solutions and technology, you can accept credit cards, debit cards and even gift cards.
What’s your advice for using business credit cards?
One of the best cases for using a business credit card is that it allows you to keep your business expenses completely separate from your personal expenses. With many cards, you will receive detailed reports of expenses that are already sorted by categories. That can make it a lot easier for both you and your accountant during tax season — saving time and resources.
Many small business owners have cards issued to employees. You have to be careful and monitor spending, but imagine how much easier it is for employees to pay their expenses with a credit card instead of dealing with the tedious paperwork of requesting reimbursement checks. This allows your employees more time to focus on their core job responsibilities.
Additionally, you get the usual benefits of credit cards, such as various rewards programs, a credit line that you’re able to access and protection against fraud for purchases made with the card.
What is remote deposit, and how does it help small business owners?
Business owners and their employees need to make the best use of their time. One way to do that is to avoid frequent trips to the bank to make deposits.
With remote deposit, you can deposit checks right from your office. You simply scan checks and they’re automatically deposited into your account. That means you can make deposits anytime — on weekends or in the evening — which can give you an extended deposit window for crediting funds to your account.
Remote deposit also allows you to store images of checks electronically so there’s no need to store physical copies of deposited items.
What do you say to business owners who don’t see value in solutions like these?
Time and time again these solutions and others really move the needle in terms of streamlining operations and enhancing revenue opportunities. Not every solution fits every business, of course, but with a wide range of choices, your business banker can help you customize solutions that address your goals and add more value to your business.
Betty Rengifo Uribe is executive vice president at California Bank & Trust.
Website: Helpful resources for small businesses.
Insights Banking & Finance is brought to you by California Bank & Trust
As if competing against corporate America and big box retailers weren’t enough of a challenge, smaller merchants have to contend with tectonic shifts in the way consumers shop and pay for goods and services.
For instance, e-commerce wasn’t a factor just 10 years ago, but in 2011, U.S. online sales reached $194.3 billion according to the Commerce Department, and more than 90 percent of online transactions are paid by credit or debit card. Gift cards are the latest craze, according to First Data’s “2011 U.S. Gift Card Consumer Insight Study.” So merchants need to stay abreast of the latest and greatest in technology to support their revenue goals.
“Offering customers multiple payment channels opens up new sales opportunities, and, best of all, merchant services provides the ability to increase revenue without investing in additional staff, technology or brick and mortar,” says Lynne Duke, vice president and merchant services manager for California Bank & Trust.
Smart Business spoke with Duke about the opportunity to cost-effectively attract new customers through merchant services.
How has merchant services evolved to meet shifting customer preferences?
When credit and charge cards became popular during the 1950s, retailers needed a way to accommodate their customers and provide payment alternatives, so merchant services was born. Over time, both the services and technology have evolved due to changes in customer buying habits and preferences. Today, even the smallest merchant can compete against giant e-tailers by giving customers the ability to buy products online; purchase, redeem and reload cards; and even use a smart phone or tablet app to pay for goods and services.
How can merchant services improve the customer experience and help small retailers compete?
Providing customers with every possible purchase or payment option increases customer convenience and satisfaction. This will make it more likely that they’ll be a return customer. Many customers prefer to shop online or avoid credit card debt by paying with a check or debit card, so by providing these payment options you’ll help ensure prosperity.
How do merchant services help boost the bottom line?
Business of all sizes are now able to cost effectively sell their products and services across the globe. The only requirement is to have a merchant account with Web access and online processing. In today’s market, there is no need to invest in pricey point-of-sale systems when you can easily transact business 24/7 by accessing a virtual terminal via a personal computer. If a customer requires mobile processing for events such as fairs and art shows, wireless terminals and technology support those venues.
Which merchant services are most helpful?
Merchant services provides solutions to meet business needs for many industries, and helps level the playing field between small and large merchants by providing several benefits:
? Robust online reporting: Provides a real-time view of sales transactions and detail for customized reporting, transaction analysis and trend monitoring.
? Online gateway/virtual terminal: Eliminates boundaries by allowing customers to complete secure online transactions using any major credit or debit card. A virtual terminal provides the best solution for the ‘card not present’ environment.
? Wireless solutions: Accept credit card payments and print receipts at trade shows, farmer’s markets and other remote venues through a wireless credit card processing machine. Smart phones are entering the race and provide another avenue for payment processing.
What should merchants consider when selecting a provider?
The industry is very competitive with a mostly generic product offering; however, pricing strategies for merchant services are complex and vary dramatically by provider. Consequently, merchants need to scrutinize proposals, review pricing components, calculate the effective rate and estimate the bottom line impact of each pricing model before selecting a provider. For instance, the options available today are bundled, tiered or pass through. Each includes a per-item fee and a discount rate. Each price plan carries its own pros and cons. Always be vigilant about hidden charges and know exactly how much you’ll be paying each month for merchant services before you sign a contract.
Service levels and reliability also vary by provider. Surprisingly, some of the biggest processors actually have the least favorable service. Will someone be there to take your call 24/7? Will you be talking to a bank employee or an offshore representative? How quickly will they respond to equipment failures? Ask to see a copy of the provider’s service level agreement, and make sure the provider has a solid reputation in the marketplace, because success abounds when you partner with a trustworthy merchant services provider.
Lynne Duke is vice president and merchant services manager for California Bank & Trust. Reach her at Lynne.Duke@calbt.com or (619) 446-2240.
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