Thomas Woolway, the Senior Vice President and Regional Manager of Torrey Pines Bank's Carmel Valley Office, recently took the time to answer a few questions about small business banking and finance concerns.
What Should a Small Business Look For When Choosing a Bank?
"Everyone is different in what they are looking for in a banking relationship. Some people want convenience so very likely they will establish a relationship with a “big” bank since they tend to have more branch office locations. Other people prefer a smaller, more personal approach to banking so they will tend to have their accounts at a community bank. All banks offer essentially the same services- term loans, lines of credit, deposit services, online banking, etc. The real difference will be the people.
If you, as a small business owner, need nothing more than a checking account then any bank will do. If you need a broader relationship that involves a credit facility of some sort (term loan, line of credit, real estate loan) then you should find a banker you feel comfortable working with – someone who will take the time to get to know you, your business and your industry. Your banker will be your advocate within the bank and will be the person who will recommend loan requests for you. You need to have a banker who will work with you to determine the best financing structure for your business. View your banker as you do your attorney, your CPA and your insurance agent. These people are valuable resources to help you run your business more effectively."
Are There any Documents the Business Owner Needs to Bring to Open an Account?
"The usual company documents required are: Articles of Incorporation, Statement of Information and By-laws. The individual signers on the accounts will have to provide a picture-identification and one other form of identification."
Which Banking Options are Available?
"From a lending standpoint, there are two main banking options: conventional and SBA. A conventional loan is a loan directly with the bank. The customer will negotiate with the bank for the terms, pricing and structure of the loan. An SBA loan is a loan that is underwritten by the bank but the loan will be guaranteed or funded by the SBA. SBA loans tend to have more favorable terms (i.e. longer maturity dates) than conventional loans, but SBA loans tend to be priced higher than conventional loans. SBA loans are designed to assist smaller businesses during the initial stages of their life cycle. Once a business is mature and is able to generate consistent cash flow, conventional financing is more appropriate to support the company’s growth."
Since Mr. Woolway has 24 years of banking experience, including several stints as a bank manager, degrees in Business Administration and Corporate Finance and experience as a board member of the San Diego Mayor's Advisory Board for small businesses, he knows what he is talking about when he gives business banking advice to small business owners. Mr. Woolway also spent five years in active duty and 15 years in reserve duty as a Commissioned Officer in the US Navy and retired as a Commander.
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