Episode 31: How To Choose The Right Bank For Your Medical Business
I want to talk about what you need to look for when choosing a bank for your medical business.
You need a bank with a designated point person who has a deep understanding of the complexities of medical businesses.
Here are 3 key things that you want to assess when assessing a bank’s quality of service:
- You want a bank that demonstrates a firm understanding of a medical practice’s unique cash flow needs. As we all know, medical businesses function differently than a typical business. What services are offered to you and how much they cost is largely impacted by how familiar the financial institution is with medical businesses.
- You want to understand the bank’s responsiveness. For example, how quickly are deposits credited to your account? Are capital requirements met in a timely and efficient manner? For example, if you have a line of credit with them—how easy is it to access? If you need a loan—how many hoops do you need to jump through. Everything — from tracking an important wire transfer to helping finance an expansion project — should be addressed with speed and efficiency. The bank is there to make your life easier—not be a nosebleed.
- The bank should be easily accessible to answer questions; provide training on any account-related technologies; and offer insights into how it can meet your banking, financing and treasury management needs. Having a dedicated, single point of contact to address your businesses unique needs is crucial to understanding and anticipating challenges. Your financial partner should be easily accessible to answer questions.
Before deciding on a bank ask for references from other medical businesses.
Now I want to talk about products and services that you want your bank to offer in order to address the unique financial needs of your medical business.
Business checking
There are several factors that you are going to want to consider:
- Is a Minimum Balance Required?
- How quickly do You Have Access to the Funds?
- How Often Will You Make Withdrawals?
- How many deposits Will You Be Making?
Now that I’ve talked about banking (and essentially money coming into the bank), let’s talk about loans.
- Revolving line of credit- borrow as much or as little as you need to meet your working capital needs
- Term loan- to finance longer term investments like an expansion of your office or opening a new satellite office
Full suite of treasury management products and other services:
- Lockbox services
- Remote deposit capture
- Biller and payment solutions
- Fed EDI
- Fraud protection services
While most physician business owners don’t spend a lot of time or effort in choosing the right bank for their business doing your due diligence will pay dividends. A good banker will improve your workflow, your revenue cycle management and compliance.
For a full searchable copy of the transcript, https://www.thepracticebuildingmd.com/podcast
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