U.S. banking system is the largest and most diversified in the world. Both national and foreign banks are present in the U.S. market. Commercial banks, investment banks, savings banks, savings and loan associations, credit unions, leasing companies, finance companies and factoring companies, that provide asset-based financing, are examples of the different types of financial institutions that comprise the U.S. banking system. They offer the widest range of products and services globally, ranging from personal to small business, corporate and institutional banking and can tailor their services to the specific needs of a client.
When somebody starts a new business or contemplates some business operation the relationship with a bank is of prime concern. For a new business entity or a branch the first thing is to open a basic checking account. Checking account exists to conduct daily business operations, such as paying to the vendors, accepting transactions from the customers, paying employees, and making other regular business expenses. Nowadays more and more transactions are done electronically and online banking allows the owners to access their accounts and do necessary actions from any place of the world 24/7.
The other type of account a company may need is a merchant account. The merchant account allows you to accept payments from your customers by credit and debit cards. This convenience may draw more clients to your business as well as make existing clients to pay their bills quicker since they do not have to pay cash out of the packet.
If the business earned profits, which it does not need to spend or otherwise distribute immediately, those profits may be deposited into a savings account. The company generates interest in respect to the funds it has on a bank’s savings account. These accounts may be free to operate if a business maintains a certain minimum balance, and can be used to set aside a portion of excess liquid assets while earning interest. Money in a U.S. bank account is insured by the federal government up to a balance of $250,000.
In addition to operating bank accounts, most banks provide other useful services to their customers. The most frequently used ones are cash management and payroll services.
Cash management service means that the bank’s employees, not yours, will process the payments, manage your cash balances, retrieve all necessary information on your accounts and notify you of any upcoming payments, so that you can plan your expenses accordingly. This service helps to effectively manage your money without spending time from your core business dealing with paperwork and, by taking these duties away from your staff you can use your human resource in a more productive way.
Payroll service allows you to outsource all your payroll matters to the bank. It will make payments to your employees from your checking account, prepare and file payroll statements with the government agencies and submit the reports to you.
Borrowing in the U.S.
Commercial banks supply the most funds to businesses. You may need to do certain purchases for your business on credit and use available cash for other purposes. Or you may decide to invest into an equipment or real estate for your business and do not have enough personal assets for such sizable purchase. There are various types of financing available.
In addition to the basic banking services of treasury, lending, payments and cash management, certain banks provide tailored sophisticated banking solutions in the areas of corporate finance, corporate investment, leasing, structured finance, commercial finance (factoring), real estate finance, insurance, equity markets and debt capital markets. The banks in the USA help businesses to grow, manage their day-to-day banking needs and provide a full range of banking services to help entrepreneurs achieve their business goals.