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Ask the Expert – Business Banking – Part 2

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Editor note:  This is the fourth post in our new “Ask the Expert” series.  We will post answers to questions from entrepreneurs like yourself to our group of experts in different fields.  First up is Darlene Ellison.  Today’s post is the last of four from Darlene.

What are some tips for keeping personal and business banking separate?

I cannot stress enough the importance of keeping your personal and business banking separate. Even if you are a very tiny start up, get your DBA certificate from your County Clerk’s office (or online) and open a separate business banking account from the beginning. As your business will likely grow and if/when your banking needs expand, you want to be able to keep your accounting separate for the business so you can show Balance Sheets and Profit & Loss (an accountant can help you get this set up from the start). These are requirements for loans/lines of credits or any banking services that require a credit relationship.

Will a bank fund my new business?

If the answer to this from your bank is an automatic NO and nothing further, you are probably in the wrong banking relationship. Now, most banks are going to require 2 years of financials on the business, but a good banking relationship (typically these discussions are more likely in a small, community bank) consists of a banker that considers your “total package” (that could be in strong personal financial statements, other personal guarantors with an additional source of income or your own additional source of income). Also, if your “total package” does not qualify you immediately for a loan/line of credit, you want a banking relationship that will explain to you what things you could do/what goals you should work towards in order to qualify for lending assistance. There are options. There are also outside investor options but I do tell my customers and WIB friends to proceed with caution and DO YOUR HOMEWORK. Many of these investors also require a significant percentage of ownership in your business which is not always the best route.

Ultimately, you are looking for a business banking relationship that is a true partnership, is responsive to your questions and is interested in you and your business.

Darlene Ellison has over 25 years of experience in the combined fields of child psychology and business, as well as serving as an avid community volunteer. Years as a Development Consultant, as well as her 7-year-old role as the Vice President of Business Development/Community Development Executive for Veritex Community Bank, have allowed her to create a unique business development strategic plan that focuses on niche positioning and high touch customer service. She is also the founder and coordinator of three award-winning community Women In Business organizations that help women business owners and executives gain personal and professional growth. As an extension of these programs, she has created the Future Women In Business internship program for college-aged women. Darlene was honored with the 2009 Entrepreneur of the Year Award by the Greater East Dallas Chamber of Commerce, was named a 2011 Dallas Business Journal “Women in Business” honoree and was awarded the “Pete Sessions Leadership Award” for outstanding years of service to the Greater East Dallas Chamber of Commerce. Darlene currently serves in her second year as Chair of the Chamber, is on the Board for the Dallas Convention and Visitors Bureau and serves as an Advisor on the Board of the Lakewood Service League. Darlene’s book, “The Predator Next Door…Detect, Protect and Recover from Betrayal” has been awarded both a 2009 IPPY Award Gold Medal in True Crime and a 2010 Next Indie Award Gold Medal in Autobiography. Darlene speaks all over the country on child abuse prevention, as an advocate for victims of child and family violence and as a motivational proponent of overcoming obstacles!  

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