After the financial collapse in 2008 people still have difficulty trusting the big banks. This isn’t hard to understand since it was the banks who were largely responsible for the largest financial crisis in modern times. A bank is also a profit driven institution and their aim is to generate profits for shareholders. They have high fees and take some pretty big financial risks with your money. There is an alternative and it is time to move your business accounts to a credit union. They usually have lower fees and interest rates. Those aren’t the only benefits to moving to a credit union.
Checking Account Fees
Most banks charge you a pretty penny for the ability to have a bank account and use their services. Everything costs from monthly maintenance fees to overdraft protection. On the other hand Credit Unions have fewer and lower fees. They also don’t make you keep as much money in your account to avoid fees.
Lower Interest Rates
A Credit Union is a not for profit business and that allows them to offer a lower interest rate than a traditional bank. Interest is one of the largest sources of profit for a bank and they charge the highest rates they can. Credit Unions are about serving the community at large, profit isn’t as big a priority. Switching to a Credit Union can allow you to reduce your interest rates which will save you money. There are many banks who will find your business loan too risky to lend to whereas a Credit Union may have no problems. Credit Unions believe in serving the community and want to see local businesses thrive.
Better Customer Service
Commercial banks have a management team and a board that they answer too, this drives them to increase profits often at your expense. You can see increases in account charges, higher interest rates, higher fees and more fees added to your services. The business model doesn’t leave much in the way of providing customer services to their customers. Credit Unions have better incentive to give you better interest rates, fewer service charges and much better customer service. That turns into cheaper loans when your business needs it.
If you aren’t convinced by now that your business can be better serviced by a Credit Union then why not drop into a branch and talk with one of the managers. Then can give you an accurate idea of what they can do for you and what it will cost you. You may be surprised by how much you can save.
If you want to secure financing for your business, you need to know how much money you need. This entails the assessment of cash flow and other expenditures. Once you already know what amount is needed for your business, you can know start looking where to find the cash.Below are some tips on how you can secure financing for your business.
#1: Use a portion of your savings or salary.
If you’re on the start-up stage and you need that working capital fast, the best source you’ve got is your own pockets. Financing your business yourself means you don’t owe anyone anything. Money is about self-discipline and shoving a little away every paycheck means you can fund your own entrepreneurial dreams.
#2: Ask your friends and family to join you in a partnership.
Probably, they are the nearest source of funding next to you. You will still need to approach them in a professional manner, and bear in mind that being friends or family doesn’t mean a guaranteed yes. You can offer them a partnership and present them with a clear business plan to make that venture a success.
3: Talk to your bank.
If you have a good credit score, then you can apply for either a personal loan or a business loan. Bear in mind that when it comes to dealing with the banks you need to have all your ducks in a row. Prepare financial statements and have a business plan at the ready because they will want to see it. Analyze those interest rates carefully and make sure you have the ability to pay back the loan whether it is long or short term. Here is what you’re going to need to apply for a business loan.
4: Apply for Microloans.
Microloans are loans of a small amount and payable in a short period of time. To some extent, microloans can be very much like applying for a personal loan to banks. You will be required to present your credit statement, a simple business plan to prove the viability of your business, and collateral or personal guarantee. You can obtain a loan from $10,000 to $50,000 from the so-called “micro-lenders.” They are the non-profit organizations that serve as an intermediary between you and the Microloan Program.
5: Approach Venture Capitalists and Angel Investors.
Venture Capitalist or VCs are wealthy people that devote themselves to making money out of investing in businesses. They form the so-called VC firm, a financial institution that funds start-ups and small businesses with high-growth potential. Angel investors usually invest their money in entrepreneurs with strong determination to grow their business. Both VCs and angel investors are investing their money in exchange for higher returns and equity share in the company.