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A summary of how small-to-medium-size businesses fulfill their banking needs. Topics include understanding business loans and their details, account analysis, evaluating a bank's services and how they fit specific business needs, a list of internet resources, and much more. Titles in Barron's Business Library series are currently being revised and updated, and re-set in an attractive new paperback format. They are written especially for men and women starting a company or managing a small-to-medium-size business....
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A summary of how small-to-medium-size businesses fulfill their banking needs. Topics include understanding business loans and their details, account analysis, evaluating a bank's services and how they fit specific business needs, a list of internet resources, and much more. Titles in Barron's Business Library series are currently being revised and updated, and re-set in an attractive new paperback format. They are written especially for men and women starting a company or managing a small-to-medium-size business. Emphasis is on practical problem solving, and examples cited in these books are based on realistic business situations.
Here is an inside look at the mechanics of banking for the business person who deals with banks on a regular basis. The many-faceted role of banks is explained, primarily as it relates to small and medium-sized misunesses. Attention is given to matters such as business loans, international banking, account analysis, evaluating a bank's health, how banks analyze financial statements, and much more.
|Preface to the Second Edition||iv|
|1||About This Book||1|
|2||How Banks Work||7|
|3||Choosing the Right Bank||17|
|4||Evaluating Your Bank's Health||25|
|5||Deposit Accounts, Balances, and Account Analysis||35|
|9||Presenting Your Loan Request||85|
|10||How Do You Look to Your Banker?||89|
|11||Picking the Right Loan Officer||97|
|12||The Philosophy of Lending||103|
|13||The Loan Side of the Bank||113|
|14||Loans and Lines of Credit||119|
|15||Collateral, Guarantees, and Personal Statements||135|
|16||Financial Statements: The Balance Sheet||149|
|17||Financial Statements: The P&L and the Ratios||159|
|18||When Your Loan Request Is Turned Down||173|
|19||When to Change Banks||179|
|Sample Loan Forms||183|
|Selected Further Reading||209|
The business of banking has gone through many changes, mostly for the better, over the last ten years. The banking industry as a whole is healthier and in better financial condition than during the "credit crunch" of 1990-91, when banks across the United States sharply curtailed their lending activities in the face of an economic recession and a pile of deteriorating loans secured by real estate. Banks learned their lessons from that period, and today they are more inclined to look to a borrower's cash flow from business operations than collateral as the source of loan repayment. The deposit insurance system has been strengthened and the cost of insurance is tied to financial risk; better capitalized banks pay a lower cost of deposit insurance than weak banks. Bank customers now have access to more information about their bank's financial condition, which is accessible on the Internet from banking regulators and other sources, so they can more easily pick the bank best matching their needs.
The first several chapters in this updated edition discuss how to select a bank and evaluate your bank's financial health. Also reviewed are important bank services, such as deposit accounts, cash management, and trust services. The next several chapters (chapters 9 through 18) review the steps in presenting a loan request, from initial contact with your loan account officer to common types of loans, including recent enhancements to the Small Business Administration guaranteed loan program. The final chapter discusses options when it's time to change banks. Included in the appendix of this book are two new directories, an Internet Resource directory and a listing of related books and sources of information for further reading.
Thomas P. Fitch