Small Business Blog

The American Bankers Association (ABA) recently published a white paper entitled, “Assessing Your Banking Relationship: Seven Key Questions.” The article is the fifth in a series of white papers intended to help small businesses obtain bank loans.

In the article, author Robert Seiwert poses seven true/false statements to help you evaluate the quality of your relationship with your bank. The purpose of this evaluation is to determine whether your bank will continue to “be there” for you, in terms of providing financing when you need it, giving you competitive pricing on financial products and services, and offering you guidance and support as you set out to achieve your business goals.

The premise of the article is interesting enough: one means of protecting your bank funding is to woo your banker, in the figurative sense. Your banker wants you to be a stable and committed business partner, and it’s up to you to prove that you fit that mold. If you aren’t making the desired impression, you will see your banker become distant and non-responsive — like a bored spouse who’s wondering if there are other, more exciting fish in the sea. (continue reading…)

 

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So you have a large debt repayment due on the 15th of this month. And you have to run your payroll on the 13th. Are you going to wait until the 10th to decide if you have enough money to meet these obligations? Or are you going to cross your fingers and hope that you have enough room on your credit line to cover any potential shortfalls? (continue reading…)

 

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Here’s a quick quiz to test your knowledge of cash flow:

Which of the following is an ongoing source of repayment for your small business credit line?

a. Your equity
b. Your accounts receivable

Which of the following is a source of cash?

a. Rising inventory
b. Rising debt

If you had to think too long to answer those questions, you might need a little refresher course on cash flow. (continue reading…)