How much capital does it take to begin cashing checks?
During the initial stages of operation (startup), when operating capital is tight, you may wish to ask your banker for the following: Immediate Credit on Deposits: This allows you to operate on a fixed amount of cash. Example: You only have $10,000 in your account, and you withdraw it Monday morning and put it in your safe, and a person comes in and cashes a $10,000 check. You are out of money and closed down. But with this privilege at the bank, you can take the check to the bank, deposit it, and immediately get another $10,000 to take back with you to operate. There is an uncollected funds charge which you will have to negotiate with your banker associated with this privilege, but it allows you to operate with limited funds. Daylight Overdraft: This is essentially a daily line of credit, which, you must cover each day before 2pm (or 3pm depending on the bank’s hour of close of business). This usually has a daily limit. Example: If you only have $10,000 to operate with, and withdraw i
