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
Business credit cards can be highly useful, efficient and versatile tools for many small business owners, as long as they are used in a prudent way. What are the benefits of using business credit cards? How should you select one? What best practices should be employed?
Smart Business spoke with California Bank & Trust Senior Vice President and Corporate Marketing Director Steven Borg to discuss how entrepreneurs can best use business credit cards to improve financial management processes and streamline cash flow.
Why should small business owners use a business credit card instead of a personal card for company expenses?
Using a business credit card instead of a personal card lets you more easily track your spending, keeping business and personal expenses separate. Most card issuers provide highly detailed reports categorizing your expenses, which can be very useful for accounting and tax purposes. Like personal cards, business credit cards may come with various rewards programs, such as cash back or additional savings on business expenses. Using a business credit card also may provide public relations value to your business by making a good impression when you’re purchasing goods and services, or entertaining clients.
What are the advantages of using a dedicated business credit card?
Using a dedicated business credit card allows you to control spending, streamline your operations, view your transactions efficiently and provide your business with fraud protection.
Business credit cards typically permit multiple users to have individual spending limits, giving you the ability to control your company’s spending while still allowing your entire team to move forward with their business needs. Additionally, having your employees use their respective business credit cards eliminates the need for your company to reimburse them for expenses. This saves on paperwork, streamlines processes and gives you more precise control over your team’s spending.
Most business credit cards come with enhanced reporting features, allowing your management team to watch expenses closely, categorize the transactions and make strategic decisions based on the complete spending patterns of your company — an excellent cash flow management tool.
Putting all of your expenses on a business credit card also offers you a certain level of protection against fraud. Like personal credit cards, the card issuer may be able to resolve problems with any products or services you’ve purchased with the card.
What are some of the pitfalls of using business credit cards?
Like any other credit card, interest builds if you let balances grow too high. In some cases, a ‘penalty rate’ is imposed for late payments, which can seriously impact your credit rating and be costly for your company, so pay off your balances regularly.
Although business credit cards allow for improved efficiencies, it is important that managers and owners continue to monitor their team’s transactions, control their expenses and pay off their balances monthly. Additionally, if your company decides to allow for multiple users, there is potential for misuse. Setting strong boundaries, creating specific spending limits and monitoring transactions monthly will reduce the risk in this area.
What should a small business owner do before applying for a business credit card?
Sit down with a business banker who understands your business and industry to help you chose the right product for your specific business needs. Review terms such as rate, grace period, any rewards programs, and perhaps most importantly, the type of information and functionality available in the monthly reporting. It’s also important to find out how credit limits are set and how you can control your employees’ use to minimize risk.
Above all, remember that while the use of a business credit card may very well be a smart business practice, it certainly does not replace astute management.
Steven Borg is senior vice president and corporate marketing director at California Bank & Trust.
Insights Banking & Finance is brought to you by California Bank & Trust