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Choosing the right bank for your business

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As today's business world grows increasingly complex, companies are shifting their focus from competing locally to competing globally. Regardless of their size, a majority of businesses are now maintaining an online presence, working with international markets, and using greater foreign sourcing and offshore production centers.

Banks have also shifted their focus to better serve their clients by staffing with trained officers who understand what it takes to compete in international markets. These officers understand banking strategies for managing cash.

For example, a banking officer serving a global company often has to consider currency exchange strategies and create a risk management plan for payment streams from both letter of credit and open account terms. Some banks work with foreign credit insurance brokers and carriers as well as diverse U.S. government programs to provide the critical tools necessary to support customers. With the rapid changes in the trade environment, it's not easy to keep up with new customs requirements, advances in automation and the best ways to cut costs. Global companies can respond quickly to new challenges and opportunities, and save time and money, by consulting regularly with a knowledgeable trade banker.

Scott Connella

A good trade banker will not only handle trade transactions with speed and accuracy, but provide real-time information so you can track documents and products at every stage of a transaction and check details ranging from price to settlement status. They will also offer guidance on how to comply with new trade regulations, such as security concerns, that have resulted in shorter timelines and more extensive information requirements for customs reporting. A good trade banker also will introduce you to the latest Web-based finance tools.

To be sure, today's global company requires customer products and a consultative approach from in order to compete in world markets.

Minimize your risk

If you do business internationally, it's important to protect your company against losses due to sudden shifts in foreign exchange currency or interest rates. This requires that a company craft a foreign exchange strategy with risk management safeguards. With the proper safeguards in place, using foreign currency to bolster sales opportunities and drive revenue are sound business practices.

Many companies rely on foreign exchange services every day to conduct business. That's why it's important to choose foreign exchange advisers who can provide timely market forecasting and overnight access to currency markets, as well as advice on areas of special interest.

The foreign exchange market is the world's largest and most volatile financial market, with more than a trillion dollars in foreign currencies traded daily. You can take a chance that the market will go your way, but you'll get better results and minimize your risk if you work with a foreign exchange expert (FX adviser) at your bank to manage your exposure according to your company's risk profile.

A good FX adviser can immediately tell you if an international purchase is cheaper in dollars or in the local currency. They can also help you obtain consistent, quality market information, minimize earnings volatility, improve gross margins and recommend when to use hedging instruments.

Manage cash flow

Choose the right banking services to streamline your collections and disbursements and make your entire operation more efficient. In addition to basic services like check processing, sophisticated imaging and Web-based products, you should look for responsive staff in both servicing centers and relationship management who are knowledgeable about your industry, your company, and who place a priority on quality.

If you're looking for convenience and better control over payables, look for a bank that has made a serious investment in Web-based cash management. This includes not only online account information, but also a full range of options -- from stop payments and check inquiries to wires, account transfers and file transmissions. Having instant access to your account 24/7 can help manage cash flow and give you a better sense of where you are financially. That's the ultimate control.

Choosing the right bank

Your bank is a key business partner. Your banker should be a financial consultant that can offer more than simply products. As a business owner, you want to have someone in your corner who will review your company's business plan, suggest strategies and help you get to where you want to go.

Whether you need leasing, bank lines of credit, subordinated debt or asset securities, your banker should be able to provide or locate such services for you. Optimize your opportunities for success by partnering with a bank that offers sound advice on financing, investments, cash management and foreign exchange benefits.

Putting your money to work

Like any good portfolio, finding the optimum balance of risk and stability for your company's investments is key. Work with your bank's professional relationship managers and traders to develop and implement an investment strategy and portfolio mix based on your risk tolerance.

These professionals should be able to access a wide variety of high-quality investment vehicles, including government/agency securities, mortgage-backed securities, money market instruments, bond instruments, corporate securities, tax-exempt securities, derivative products and more. And, make sure your bank representatives are readily available when you need them.

If you're not sure whether your bank provides these services, ask to meet with a bank officer and ask what you need to know in order to make the right choice for your company.

Connella is the market president for Union Bank of California's Commercial Banking Group - Southern California Division. For more information, contact him at Scott.Connella@uboc.com or (949) 553-6855.

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