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Services Provided by Banks to Small Businesses

 

The last 10 years has seen the Australian market share of tradition banks fall about 5% because of the introduction of overseas banks and the changing role of other institutions such as Credit Unions and Building Societies.

 

As the increasing number of banks strive for market share and therefore develop products for particular market niches, more small business friendly banking products are immerging.  These include:

 

  • Low documentation loans

  • Increased ability to shift between lending options

  • Support with preparation of BAS statements

 

St George Bank, for instance, have introduced the Business Owners’ Transaction Package and the Business Owners’ Loan Package.  These packages include :

  • Bank Account with cheque book access (or Portfolio loan for Loan Package)

  • Visa Card with $10000 limit

  • ATM & EFTPOS access

  • Phone and Internet banking

  • Discounted EFTPOS facilities

  • Discounted Insurance

 

This type of package is available from most banks in Australia

 

RaboBank on the other hand work mainly in agribusiness industries, segmenting their Market by On Farm, Middle Market (eg processors, co-operatives, retailers etc) and Corporate.

 

In General the services offered to Small Businesses by Banks include:

Finance

  • Term Loans

  • Overdrafts

  • Bank Guarantees

  • Trade Finance

  • Credit Card

  • Financing & Leasing

  • Factoring

  • You may also choose to take out a home loan

 

Wealth Management

  • Superannuation

  • Managed investments

  • Portfolio management

  • Cash Deposits

 

Commerce

  • Merchant Facility

  • Ecommerce options

  • On-line Banking

  

 

Banking Issues for a Start Up Business

 

One of the challenges for start up businesses, especially if owners are moving into business for the first time, relates to accepting payments, especially online. 

 

Credit Card and EFTPOS 

Banks take a standard monthly fee plus a commission based sales level.  While the banks provide published commission rates, these may be negotiable.  An internet merchant account is needed when you accept credit card payments online.  Online payments are subject to some extra rules (MOTO – Mail Order Telephone Order) to face-to-face transactions because you do not have a signature.  In cases of fraud, you, not the bank, are likely to have to accept liability.

 

If you are a Start up business wishing to do business on the net you may find solutions like PayPal.  These are easy and cheap to set up, but fees per transaction are likely to be higher.  But it is a great place to start.
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