SAN ANTONIO — The collapse of Silicon Valley Bank and Signature Bank didn’t just impact big tech, it affected small business’s ability to pay employees or vendors.
The money pros at Payroll Vault in have put together a “Survive with Five” list of best practices for area business owners to help them scrutinize their banking services and determine whether they should make changes to ensure their money is safe.
“Survive with Five” - Best Practices for Small Business Banking
- Split Up – Small business owners with more than $250,000 in deposits should diversify the funds between two to three banks and use a mix of large and regional banks to best manage the risk. This also allows you to utilize referral relationships and get the best rates.
- Background Checks – Banks do their due diligence before doing business with you. You should do the same. Check the financial stability of the banks you do business with. Look up the bank’s financial statements, ratings, and reviews. Check for recent changes in its assets or its sources of finance, which will tell you if its business is concentrated in any one industry.
- Meet and Greet - Meet with your bank representatives every year and talk about your accounts and evaluate fees. Look for signs they are pro-business, ie, competitive rates, loans, no-fee banking.
- Be On Alert - Set Google alerts for your financial institutions so you can keep up with when and why they are appearing in the news. You could pick up on early warning signs of trouble.
- Cast a Line – Have large lines of credit available (possibly multiple at different banks) to deal with emergencies that might arise, i.e., making payroll.
- **Bonus Tip: This is Business 101, but bears repeating - if possible, set aside one-third of your typical monthly expenses as an emergency fund.