Bank charges may come as an unpleasant surprise when you register a Close Corporation (CC) or apply to your bank for a separate account for your small business.
Charges on business accounts are not necessarily the same as those on ordinary accounts.
In some cases they can be lower, in other cases they may be higher.
Since the banks should be competing for your business, search for the bank that offers you the best deal in terms of services and charges.
You may find there could be a charge just to open the account and that service fees on your business account may be higher than on your personal account.
Although not all banks offer special accounts for small and medium business entrepreneurs, some do and you should look at what special services, if any, they offer with these accounts and how much they charge you for them.
Some small business entrepreneurs were caught unawares recently when certain banks put up their monthly service fees as well as service charges for cash deposits.
A service station owner says from the middle of July this year his bank has charged him 127 percent more for cash deposits - the 22c per R100 fee was increased to 50c per R100.
The bank told him that it had increased the fees to discourage cash deposits and decrease its cash holdings in order to discourage criminals.
Another reader said her bank manager informed her that from August 1 the minimum monthly service fee on her Small Business Account would increase from R30 to R101,25.
The bank told her the increase was necessary to ensure that all cheque accounts were profitable or would at least break even.
Banks that offer special services for businesses usually charge fees that differ from those charged on regular cheque accounts. For example:
* Standard Bank: Offers a Small Medium Enterprise (SME) PlusPlan Account for small and micro-enterprises that are just starting out and don't require a cheque account.
There is no monthly service fee on this account; R2,50 is levied for each cash withdrawal; you pay 0,605 percent for cash deposits; R4,22 for certified cheques and R2,50 is levied for every account payment.
SME customers can also get a full cheque account which can be linked to an SME AutoBank Card which allows access to the full range of electronic banking facilities.
* Absa Bank offers a cheque account to all its business clients that comes with a different fee structure from ordinary cheque accounts.
The product is not offered as part of a branded package, but you have access to all the bank's other products and services and those offered by other divisions within the group.
Products and services available include credit cards, garage cards, international banking, home and building loans, investment services, vehicle finance and electronic banking.
Service fees are determined by the size of the account, but the minimum monthly fee is R17,10.
Allied Bank charges 55 cents per R100 for cash deposits on amounts up to R500; TrustBank charges 0,75 percent on amounts under R10 000 and 0,2 percent on amounts over R10 000; United Bank charges 63 cents per R100 for amounts under R500 and Volkskas charges 0,376 percent on amounts under R10 000 and 0,188 percent on amounts over R10 000.
* Nedbank offers a small business cheque account that comes with a range of special services including the NedTel/NedTex range of financial services via the telephone.
A reader complained that the bank recently put up its business banking handling fee for cash deposits to 68 cents per R100 or part thereof.
Charges on the Nedbank small-business cheque account can be negotiated with the branch manager.
Interest on an overdraft is based on the prime lending rate and can be negotiated with branch managers who will consider your credit record, security and the nature of the loan.
* Mercantile Lisbon Bank offers small- and medium-business cheque account facilities.
The account is no different from ordinary cheque accounts, although different benefits apply in the case of corporate clients and fees are often negotiable.
Mercantile's standard fee for cash deposits in business cheque accounts (60 cents per R100) is the same as for personal cheque accounts. So are service fees for cheques at 80 cents per R100 or part thereof to a maximum fee of R17.
* Boland Bank has no specific product for small businesses, but says it accommodates small business people by making individual assessments of their needs and recommending appropriate products. Fee structures are determined by the client's risk to the bank.
* First National Bank also does not have any products or packages directed at small businesses.
It says the small business client enjoys the same services as any other business or professional entity where fee structures and costs are associated with the risk of the business venture.
* NBS has a Small Business Unit within the NBS Corporate Division and serves clients in both the small and medium sectors with loans from R30 000 to R2 million. It does not offer cheque account facilities.