My bank, Mercantile Potomac, was recently purchased by PNC bank and switched over this past weekend. Prior to the change, PNC did a great job of providing information about their programs, terms, and services, which I read thoroughly. And thank goodness I did. There were some details in there that can bite any small business owner.
My previous business account had a fairly fast turnaround on deposits. We had been a long-time client, so even large deposits over $50,000 were generally not held and were available in our account immediately. In reading the terms of my new account, I discovered that all out-of-state deposits over $50,000 will be held for 4 days. 4 DAYS. When you’re churning cash pretty fast and working to make payroll as clients push out how long it takes them to pay their bills, 4 days is a long time! That small detail alone could result in heavy overdraft charges. If you’re smart, you at least have a line of credit available to cover you, but having to draw on that unexpectedly is never good.
The bottom line is to make sure if you’re not watching the details, someone in your company is and making the appropriate plans for dealing with them.