There's no doubt that COVID-19 has had a significant impact on small businesses. But contrary to what you may think, now can actually be the perfect time to start a new business. Armed with the right tools, you can start down the path from business idea to successful startup. Follow our 16-week series to gain all the insights you need to Start a New Business Now.
Here’s a sneak peek at what you’ll learn in Chapter 5.
It’s no secret that banks can play a crucial role in startup success: Chances are, you’ll look to your bank for funding, and every small business needs a checking account. But did you know your bank can also serve as a trusted advisor capable of helping you start and manage your ongoing business?
Many entrepreneurs aren’t familiar with the full breadth of their bank’s offerings, and that unfamiliarity can cause you to miss out on game-changing small business services that can streamline the startup process and help position you for ongoing success.
Lack of awareness can also prompt you to turn to fintechs for financing and other financial services. While fintechs aren’t inherently bad, there are disadvantages to doing business with fintechs not found with banks. For example:
- Fintechs tend to offer specialized, but fragmented, services, so they don’t service all small business financial needs under one roof. That means you need to pay multiple fintechs to get the same range of services you could get with one bank
- That fragmentation and need for multiple fintechs means no one service rep or advisor has a holistic view of your business: One fintech might only deal with lending, while another only with payment processing, and neither knows (or cares) how one impacts the other
- Fintechs do not have decades of experience helping their customers survive – and thrive – in many different market conditions. Many banks are well established and have proven they know the market. That makes fintechs riskier than banks
Though online lenders typically have higher small business financing approval rates than traditional lenders (82% versus 71% at small banks and 58% at big banks), small businesses are often dissatisfied with the online lending experience:
- Online lender satisfaction rate: 33%
- Big bank satisfaction rate: 55%
- Small bank satisfaction rate: 73%
According to an article published by the Federal Reserve, 63% of small businesses that apply for online loans say working with online lenders is challenging, and more than 50% say online lenders charge higher interest rates that traditional banks. In addition, nearly 33% say online loan repayment terms are unfavorable.
Greater satisfaction and the ability to walk into your bank and speak face-to-face with bankers are invaluable advantages you should consider if you’re deciding between traditional lending and fintechs – but those are only part of the equation. Many banks view themselves as stakeholders in your success and offer additional services that enable you to tap into a wealth of knowledgeable experience.
In Chapter 5 of How to Start a Business Now, you’ll learn how you can leverage your bank as a trusted business advisor to:
- Cover your legal bases with business filing services. Identify which documents you need to file and how to structure your company to comply with regulations
- Manage payroll and human resources. Many banks offer a bevy of tools and resources that can help you manage your payroll, taxes and employees so you can focus on business growth. Find out which services to ask your bank about
- Legally protect your business entity and intellectual property. See how your bank can help you conduct a business name search, apply for trademarks and copyright your work
- Manage your treasury. Banks can offer receivables management, payment processing and remote deposit capture services that streamline business finances. Find out how banks can make your company more efficient
- Market your startup. Marketing is critical to startup success, and some banks offer robust business branding and marketing services to get your company off the ground. See which types of marketing tools your bank can provide
At the end of the chapter, you’ll download a free plan to leverage your bank as a trusted advisor, a partner, who can help you achieve startup success.
Banks are important small business partners, but many small businesses fail to tap into their wealth of experience and full range of services designed to help startups succeed. Remember that your bank has a vested interest in your success: They want you to maintain accounts with them, and they want you to repay your loans. Discover how to leverage your bank to your advantage with How to Start a Business Now. GET STARTED TODAY.
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