16 Key Elements to Look for When Partnering With a Finance Business

16 Key Elements to Look for When Partnering With a Finance Business

16 Key Elements to Look for When Partnering With a Finance Business

Before partnering with a finance business, it’s crucial to consider various factors to ensure a successful collaboration. We’ve gathered 16 insightful tips from CEOs, co-founders, and other industry professionals, ranging from checking licensing requirements to evaluating finance business expertise. Discover what these experts recommend as essential criteria when choosing a finance partner.

  • Check Licensing Requirements
  • Compare Rates and Fees
  • Examine Compliance Procedures
  • Find Tailored Financial Solutions
  • Balance Accounting and Modeling
  • Ensure Financial Strength
  • Prioritize Transparency
  • Align Values and Goals
  • Consider Financial History and Stability
  • Plan for Potential Dissolution
  • Emphasize Ethical Practices
  • Research Partner’s Reputation
  • Find the Right Partner for You
  • Seek Proven Problem-Solving Experience
  • Determine the Range of Services Offered
  • Evaluate Finance Business Expertise

Check Licensing Requirements

With the number of finance businesses growing, it’s important to consider the licensing of a business before signing on the dotted line. The most important license for any business offering financial services is the state’s Money Transmitter License. This license ensures that the company is legally allowed to transmit funds through all methods.

In most states, businesses also need a license to sell securities, though this varies by location. Make sure you research the licensing requirements for the state in which the business operates before entering any contracts, or you may find yourself in a difficult legal position.

Matthew RamirezMatthew Ramirez
CEO, Paraphrase Tool

Compare Rates and Fees

Don’t just go with the first organization you find! Compare the rates between different organizations in order to see which one will be more cost-effective in the long run while providing quality service. Also, pay attention to any additional fees like processing or activation payments, which can add up over time and affect your bottom line unexpectedly.

Roksana BieleckaRoksana Bielecka
Community Manager, ResumeHelp

Examine Compliance Procedures

Before partnering with any finance business, it is crucial to examine their compliance procedures. Ensuring that the finance business complies with all legal and regulatory requirements protects your business from legal and financial risks.

Confirm that the financial business follows all the policies, guidelines, and procedures related to compliance. For example, if they are dealing with private financial data, they should follow all data privacy laws and procedures. Partnering with a finance business with sound compliance procedures can save you in the long run.

Jefferson McCallJefferson McCall
Co-founder and HR Head, TechBullish

Find Tailored Financial Solutions

Before partnering with a finance business, it’s important to check if they can provide customized financial solutions that match your needs and goals. This requires discussing your financial objectives and assessing if they have the expertise and resources to create tailored solutions that fit your requirements. You can also review their service portfolio to see if they have worked with similar businesses.

The finance business should be able to adapt to changes in your business or industry and adjust its services accordingly. This ensures your financial solutions remain effective over time. Choosing a flexible and adaptable finance business will help you access customized financial solutions that align with your business needs and goals, leading to long-term success.

Bill LyonsBill Lyons
CEO, Griffin Funding

Balance Accounting and Modeling

The term finance is often used as an umbrella term containing both accounting and financial modeling disciplines. I have found many finance firms to over-leverage on modeling and projections.

There is nothing wrong with honing this skill, but without adequate attention to the accounting side of the function, there will be a tendency toward optimism without recent supporting evidence.

The best firms marry these two practices well. Projections are important, but the accounting discipline comes roaring back with last month’s results, thus keeping everyone honest.

Trevor EwenTrevor Ewen
COO, QBench

Ensure Financial Strength

Growing a business is like walking a tightrope, and financial strength is your only safety net. It’s the backbone of every successful business and the difference between thriving and surviving. You should be smart with your money, keep your expenses in check, and ensure you always have enough capital to fuel your growth.

Finding investors who believe in your vision is crucial, but you must also be willing to take risks and make smart investments. Managing cash flow is like playing a game of chess—you should think several moves ahead and make strategic decisions. Financial strength separates the amateurs from the pros in the business world, and it’s not for the faint of heart.

Saneem AhearnSaneem Ahearn
VP of Marketing, Colorescience

Prioritize Transparency

Consider the level of transparency the potential partner is offering in their operations and financials. For the sake of your company’s reputation, you need to be sure that you’re partnering with an entity that adheres to the highest standards of financial and operational conduct. It’s a major red flag when the potential partner isn’t forthcoming about these aspects of their business, and this should dissuade you from partnering with them.

Dr. Willy PortierDr. Willy Portier
Co-founder, Concerty

Align Values and Goals

The most important factor to consider when forming a partnership with a financing company is the alignment of values and long-term goals. Finding a partner whose values align with yours is essential for building a firm basis for collaboration. Make sure your long-term goals coincide, as this will promote mutual success and progress.

In my role as CEO, I prioritized finding an organization that matched our fundamental values of honesty, creativity, and customer-centricity when we were looking for a financing business partner for our firm.

We had extensive conversations to learn about their long-term aims and ensure that they were in line with our own. This alignment provided a solid foundation for advancement and synergy.

Percy GrunwaldPercy Grunwald
Co-founder, Compare Banks

Consider Financial History and Stability

One thing to look for before partnering with a finance business is to consider the financial health and stability of the potential partner.

This includes factors such as their creditworthiness, cash flow, and overall financial history. It’s also important to consider the reputation and experience of the partner in the industry, as well as any potential conflicts of interest that may arise because of the partnership.

Conducting thorough due diligence and seeking advice from legal and financial experts can help to ensure that you make an informed decision and avoid any potential pitfalls or risks associated with the partnership.

Brenton ThomasBrenton Thomas
CEO, Twibi

Plan for Potential Dissolution

When moving forward with a finance partnership, it’s important to think long-term, and that means planning for a potential split. Dissolution occurs for a variety of reasons, some amicable, some less so. If you decide on some basic terms ahead of time, you’ll ensure the process goes smoothly under any circumstances.

Put terms of compensation to paper. Consider the possibility that one branch wants to exit before the other and quantify the value of spent time and resources. If a sale occurs, will proceeds be shared?

Don’t leave tough decisions for the last minute. When dissolution is suggested, tensions might be high.

Travis HannTravis Hann
Partner, Pender & Howe

Emphasize Ethical Practices

When considering a partnership with a finance business, it is crucial to prioritize ethical business practices. This means conducting a thorough background check on their history of compliance with laws and regulations, as well as assessing their commitment to transparency and fair dealing.

By partnering with a finance business that values ethical behavior, not only can you mitigate risks associated with potential legal and reputational damage, but you can also establish a long-term and trustworthy relationship with a partner that shares your values. Ultimately, prioritizing ethical business practices sets a foundation for sustainable growth and success.

Tarun SahaTarun Saha
Co-founder and CEO, StallionZo

Evaluate Partner’s Reputation

Conducting a thorough background check can provide valuable insights into their track record, client satisfaction, and overall credibility. It is essential to assess their financial stability and reliability to ensure a secure and long-term partnership.

It is also beneficial to evaluate their expertise and industry experience to gauge their ability to meet specific financial requirements.

Factors such as the range of services they offer, their technological capabilities, and the level of customer support they provide can contribute to making an informed decision. Seeking referrals or recommendations from trusted sources can also help verify their reputation.

By carefully evaluating the reputation of a finance business, startups can establish partnerships that align with their financial goals and contribute to their overall success.

Peter ReaganPeter Reagan
Financial Market Strategist, Birch Gold Group

Find the Right Partner for You

Just because a finance business is good does not mean it is the right one for you. In finance, reputation and track record are everything, so the desire to go with the “best” available is understandable.

This is an overly simplistic approach, however, much more important than finding the best finance business with which to partner is finding the right partner for your business.

Their services and expertise should align with your specific needs, with your industry, and with your business model foremost, because ‌their success will be tied to your success.

Onno HalsemaOnno Halsema
CEO, Contentoo

Seek Proven Problem-Solving Experience

Proven problem-solving experience is one thing to always look for. When a business can show a natural knack for solving problems, it shows they know what they are doing. That speaks volumes about their credibility. If a business has no evidence to back up its claims, they lack reliability and may not be as capable as they are leading on.

Monte DeereMonte Deere
CEO, Kizik

Determine the Range of Services Offered

It’s important to assess whether the finance business provides the specific services that align with your needs and requirements. A comprehensive range of services shows that they have the expertise and capabilities to address various financial aspects of your business.

This can include services such as accounting, bookkeeping, tax planning, financial analysis, investment management, or loan and financing options. By partnering with a finance business that offers a diverse set of services, you can ensure that your financial needs are met and that you have access to comprehensive support and guidance.

This enables you to streamline your financial processes, make informed decisions, and receive tailored solutions that cater to your unique circumstances. A finance business with a wide range of services may also be better equipped to adapt to your developing needs as your business grows and faces new financial challenges.

Roy LauRoy Lau
Co-founder, 28 Mortgage

Evaluate Finance Business Expertise

One crucial thing to look for before partnering with a finance business is their expertise. Evaluate the finance business’s proficiency and experience in the specific areas relevant to your partnership needs, such as lending, investment, or financial planning.

Assessing their depth of knowledge and track record in these areas ensures they possess the skills and understanding to meet your specific financial requirements. Partnering with a finance business with expertise in your desired areas can provide valuable insights, guidance, and tailored solutions, ultimately leading to a more successful partnership.

Jason CheungJason Cheung
Operations Manager, Credit KO

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