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Long queues, voice prompts show no bank is better than the other
November 19, 2009
By Nikki Viljoen
Let me just say from the get go that I find banks to be a necessary evil. From a small business owner's perspective they are, without a shadow of a doubt, one of the most frustrating suppliers that you will ever have to deal with. Often their own internal "red tape" can be so complicated and completely unresponsive to the challenges faced by a small business owner.
That said, most entrepreneurs would need a bank at some point in their lives if they are to grow and build sustainable businesses.
A few weeks ago I was asked to write an article with the theme: Choosing a bank as an entrepreneur. I spent an interesting couple of hours one afternoon phoning the "Big Four" to see what they had on offer for a start-up.
Posing as a recently registered business and asking what was on offer and why would I want to become a client - here are some of the issues that need to be considered, as well as costs and requirements.
At Absa, the staff at the branch were reluctant to discuss anything over the phone, preferring that I book an appointment to speak to one of their personal bankers.
They have no package designed specifically for small business start-ups and the banking charges are R48 a month and then charges of R6 for every R100 (or part thereof) and a maximum of R35 for cheques that are issued, and an internet fee of R90 a month and R5.60 for every transaction.
Loans and overdrafts are not given when an account is first opened, but are considered after a period of time depending on the type and amount of security that the individual has to offer as surety.
At FNB, I kept being put through to various individuals who also put me through to various other individuals. They do have a business cheque account that is designed for small businesses.
Part of the process of opening the account, however, is that a credit check is done on you as an individual.
Rates are R38.50 with internet charges sitting at R7.20 for every transaction. There is no internet fee and their "in contact" facility is also free.
Clients are encouraged to engage in a relationship with a business relationship consultant and once this is established (provided you meet the criteria) loans will be considered.
Overdrafts are not given initially, but once you have built a credible credit history, they may be considered.
Nedbank staff were reluctant to give me information telephonically, promising to send information by means of an email.
Three hours later nothing had been received. They do have a specific package that is geared for the start-ups and it involves a loan of R100 000, provided the company is less than two years old and meets the criteria. Part of the criteria is that the company has a minimum of 20 percent of the loan as a deposit and the loan is carried over a period of five years.
If the small business qualifies then there are no banking charges on the account for a period of two years.
Standard Bank's directory, listed 086 number, is a call centre and the voice that you hear as you hold says that in the interest of customer efficiency they have centralised the customer services to a single number. The real live person who then answered the phone gave me a branch number to call - (it) seems like the centralised customer services division could not help this potential customer.
The branch switchboard operator also could not help and said "someone" would call me back. Three hours later no-one had called.
One thing for sure, though, the amount of paperwork to open an account or apply for a loan or an overdraft is staggering and I am sure that every tree on the planet shivers in anticipation of being chopped down to produce that paper.
To open an account, Financial Intelligence Centre Act requirements are a copy of the CK documents, copies of members' identity books, proof of residence of the members and proof of residence of the firm.
Requirements to secure a loan or overdraft range from, but not limited to, a business plan, financial statements, six months projected income, your personal bank statements of between three and six months (depending on the bank), security documentation and suretyship documentation, as well as proof of collateral.
Service from the different banks, in my opinion, is much of a muchness - that is to say, there is very little variation.
From staff, who clearly are in need of training, to queues of frustrated and irritated customers, either in the banks or holding on phones and listening to mechanical prompts, (I) often wonder if "the other bank" is any better. At the end of it, one only discovers that each bank is pretty much the same as every other bank.
Nikki is an internal auditor and business administration specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za or http://www.viljoenconsulting.co.za
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