Obtaining an Excellent Bank Rating

1. YOUR LOGO HERE Obtaining an Excellent Bank Rating

2. YOUR LOGO HERE Your name here Your title or company name here Your phone number here Your email address here YOUR PICTURE HERE

3. Business Bank Accounts • It is essential that a business owner separate their personal and business banking • This is critical in running a successful business • One of the major financial tools used to accomplish this is a business bank account • A business bank account helps maintain accurate records, prepare reports, make deposits, withdrawals, wire transfers, issue checks, and much more

4. Business Bank Accounts • Whether a business owner decides to open an account at a national, regional, or local bank, credit union, or community bank, they should select a bank that can best cater to the needs of their business • While every bank offers various types of financial business products, each serving a specific need, one thing remains the same throughout: bank credit

5. Bank Credit • Bank credit is the total amount of borrowing capacity a business can obtain from the banking system • This is not the same as business credit, which is a much broader category of lenders such as suppliers, credit card issuers, or leasing companies

6. Bank Credit • A business can secure more business credit quickly as long as it has a minimum of one bank reference and an average daily account balance of at least $10,000 for the past three months • This yields a “Bank Rating” of Low-5 (meaning an ADB of $5,000 to $30,000) • A lower rating, say a High-4, or balance of $7,000 to $9,999 won’t put a stop to the business’s application, but it will slow down the approval process

7. Bank Ratings • This rating is the average minimum balance maintained in the business bank account over a three (3) month period • A $10,000 balance will rate as “Low 5″ • $5,000 rates as “Mid 4″ • $999 rates as “High 3″ • …and so on

8. Bank Ratings • The main goal should be to maintain a minimum “Low 5” bank rating ($10,000) for at least 3 months • Unfortunately, without at least a “low 5″ rating, most banks will assume the business has little ability to repay a loan or a line of credit

9. Bank Ratings • High 5, account balance of $70,000-99,999 • Mid 5, account balance of $40,000-69,999 • Low 5, balance of $10,000-39,000 • High 4, 7,000-9,999 • Mid 4, 4,000-6,999 • Low 4, 1,000-3,999

10. Bank Ratings • Business owners should do whatever they can to keep at least $10,000 in their account over a 90-day period • The money should be kept there just to ensure the bank rating is high enough to increase future financing approvals • Each cycle is based on the balance rating during the previous three month period • So before a business decides to apply for credit, it should keep a balance rating of “low 5” for the past three months

11. Bank Ratings • It is also essential that the business owner ensures that their business bank accounts are reported exactly the way all their business records are, with the exact same physical address (no P.O. Box) and phone number

12. Bank Ratings • It is vitally important that every credit agency and trade credit vendor, every record-keeper (financial records, income tax, web addresses and e-mail addresses, directory assistance), also lists the business name and address the same way • No lender is going to stop to consider all the ways a business might be listed, when they look into the business’ “credit-worthiness” • If they can’t find what they need easily they will simply deny the application

13. Bank Ratings • It is also essential that a business manages its bank account responsibly • This means the business should avoid writing non-sufficient funds (NSF) checks at all costs as it destroys bank ratings • Non-sufficient-funds checks are something no business can let happen • It’s even a good idea for the business to add overdraft protection to their bank account as soon as possible to avoid NSFs

14. Bank Ratings • It is also very important that a business show a positive cash flow • The cash coming in and going out of a company’s bank account should reflect a positive free cash flow • Positive free cash flow is the amount of revenue left over after the company has paid all its expenses • When the account shows a positive cash flow it indicates that the business is generating more revenue than is used to run the company

15. Bank Ratings • It’s important to also recognize that banks are motivated to lend to a business that has consistent deposits • A business owner must also make regular depositsto maintain a positive bank rating • It is vital that a business owner make a lot of consistent deposits, more than the withdrawals they are making, to have a good bank rating

16. Bank Credit • Bank credit is not only based on monthly deposits, balance rating, and check history, but also includes: • The Age of the account • The bank products the business uses • And any savings account or investments the business has

17. Age of Bank Account • A seasoned bank account shows stability and longevity in the eyes of lenders • Keeping a healthy and long standing relationship with a bank is also crucial for all companies • A good, stable, relationship with a bank that reflect longevity will be highly appreciated by lenders considering lending that business money

18. Bank Products being Used • Your bank rating will be higher the more bank programs you use, maintain, and pay as agreed • Having investment and savings accounts help your bank ratings • Having open loans, even open CDs help your bank rating

19. Savings and Investment Accounts • Bank ratings are higher the more banking investment and savings accounts you have • Having higher balances in those accounts further helps bank ratings • Making regular deposits into these accounts also helps your bank ratings

20. Bank Ratings • Beyond just the bank rating, a business’ bank should also act as a trusted advisor that can assist in growing the business • It helps a business to consider working with a financial institution that specializes in providing banking services tailored to their specific industry • The more services the bank offers that the business can take advantage of, the higher the bank rating will be

21. Bank Ratings • Working with a lender that already understands their business makes it much easier to get a loan approved, compared with other lenders • This is because the majority of lenders have difficulty assessing the credit risk of most small businesses or some any industries they know little about • And many banks have “niches”, or industries they just work better with

22. Bank Ratings • While profit and loss statements, tax returns, business credit and personal credit checks are common requirements in the lending process, it is much easier for a lender to underwrite the business’ financial risk when it truly understands and specializes in making loans to a company in an industry they are familiar and comfortable with

23. Building an Exceptional Bank Rating • Having a good bank rating is essential with securing bank financing • Insure you keep your bank balance average over 3 months as high as you can, preferably over $10,000 • Insure your account doesn’t go negative and you incur NSF charges as these will destroy your bank rating

24. Building an Exceptional Bank Rating • Take advantage of and use other services your bank offers such as CDs, savings accounts, and other investment accounts • Open your bank account when your corporation starts, and leave it open as this longevity will help your bank rating • Make consistent deposits on a regular basis • And insure each month you have good cash flow through your account by regularly putting into the account more money than you take out

25. Building an Exceptional Bank Rating • Taking these steps will insure you have an exceptional bank rating • An exceptional bank rating means your business will have a great chance of being approved for bank financing including loans, credit lines, and credit cards

26. YOUR LOGO HERE Your name here Your title or company name here Your phone number here Your email address here YOUR PICTURE HERE