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As a virtual CFO, I have worked with a lot of small businesses to improve their financial processes. A lot of Entrepreneurs are so busy working in their business versus on their business, they make some common banking mistakes that can hurt their business. The following are five common banking mistakes that I have observed and are easily fixable.
1. Banking Only at One Bank: It is easy for a small business owner to utilize one bank and perform your banking activity through that one institution. However, this can have ill side effects. When it comes time for a loan and your bank denies you, if you don't have a relationship with another bank, you could be out of luck. Secondly, you should make banks compete for your business and shop around for the best deals. You need to have a good handle on what your money management needs are to get the best deal for you. Thirdly, if your business is with a small bank and you are fast growing and needing financing, you could outgrow the one banks ability to finance you by hitting their exposure ceiling.