Standard Bank business investment and company liability solutions
In many ways a business is like a person, as it has financial requirements that change as the business grows and matures. Along the road to success a business requires ready access to cash, a need to save for the medium-term and also invest for long-term prosperity. Most importantly, a business needs a financial partner like Standard Bank to advise and assist as it builds opportunities in a competitive market place.
Standard Bank has an unrivaled, comprehensive suite of business products that offer all any business would need, regardless of whether it is a young ‘start-up’ or a mature business looking to expand.
Services and products offered include savings and investments that help ensure that cash flow is maintained and that working capital and surplus funds can be accessed immediately or over agreed notice periods. These include:
Immediate access solutions
A Call Deposit account requiring an initial deposit of just R1,000
The Call Deposit account offers on-demand access to surplus cash, interest earned on positive balances and the convenience of being available for indefinite periods. It is ideal for:
- Investing surplus cash;
- Flexibility for regular transfers of funds between Standard Bank accounts.
A MoneyMarket Call account with an initial deposit of R20,000
This offers competitive interest rates on larger amounts, but guarantees immediate access to funds.
It is a secure investment suited for:
- Earning market-related interest;
- Depositing lump sum amounts without restricting access;
- Making unlimited deposits and transfers;
- Linking to a Standard Bank transactional account to enable inter-account transfers as required.
A MarketLink facility requiring an initial deposit of only R5,000
This is perfect for performing simple transactions whilst earning market-related interest on a secure short-term investment solution. The account is also suited as a home for monthly or recurring payments.
Think about a MarketLink account for your business needs:
- A low risk investment option for surplus cash;
- Flexibility for simple transactions;
- Additional deposits and transfers as needed;
- No monthly fees unless the balance is less than R1 000 and the account has been inactive for three months.
Notice Deposits are tailor-made for short to mid-term planning for future projects or payments. They pay high interest rates on funds not required for a fixed period. If you require a short-term savings solution to help you accrue interest on, for example, end-of-year bonuses or creditor payments, look no further than these solutions.
The 32 day Notice Deposit, which requires a minimum deposit of R 250 at competitive interest rates
The investor can decide whether all funds or a portion thereof, are withdrawn after giving notice. It is ideal for businesses looking for:
- A secure investment option for surplus cash;
- A solution that enables additional deposits to be made into an account;
- A better return on investments;
- The ability to link the account to a Standard Bank AutoBank Card so that various self-service channels can be used.
The Business Flexi Advantage which caters for access to a portion of funds deposited
The Business Flexi Advantage offers a fixed deposit from 33 days to five years that still gives access to funds when opportunities to invest for growth or business emergencies arise. In the meantime, your money earns competitive interest rates. The solution is for businesses that:
- Want to invest funds for more than one month;
- Have Rollovers or Fixed Deposits that have matured;
- Require a solution to manage a mix of term and demand deposits;
- Need access to 20%, 30%, or 40% of the fixed portion during the term of the product;
- Want Inter-account transfers at a Standard Bank branch or by instruction through BizDirect, the Service Response Team (SRT), or the Commercial Service Unit (CSU);
- Wants interest that is paid monthly, quarterly, annually or on maturity.
A Fixed Deposit account that allows you to choose the fixed period that best suits your business
Fixed Deposits offer long-term planning options of lump sums for fixed periods at interest rates that do not fluctuate during the investment term. The Fixed Deposit account offered by Standard Bank enables you to choose when the investment matures. This solution is created for businesses that:
- Want a risk-free investment option for surplus cash;
- Wish to set investment periods of between 33 days to five years;
- Require a guaranteed fixed interest rate;
- Want interest to be paid monthly, quarterly, annually, or on maturity;
- Want the ability to link to a Standard Bank AutoBank Card, which offers access to various self-service channels.
Short-term Wholesale Deposits
Funds can be invested in this account for fixed periods between seven and 31 days. This is great for companies that wish to:
- Invest surplus cash for between seven and 31 days and have more than R100 000 to invest;
- Earn a fixed rate of interest for the period.
Shari’ah Business banking
Standard Bank’s Shari’ah business banking is based on the principles of Shari’ah law and is guided by Islamic economic principles.
For Muslim business customers, Standard Bank has the expertise required to assist with services that range from developing short-term financing needs for working capital through to assistance with complex international transactions to be conducted in terms of Islamic law.
Foreign Exchange Services
The South African rand is well-known for its volatility against benchmark international currencies such as the Euro, British Pound and US Dollar. Standard Bank assists importers and exporters to hedge against unexpected changes in rand value through its Forward Exchange Contracts offerings.
Forward Exchange Contracts (FEC’s) are used to secure a rate today for settlement at some time in future, usually longer than two business days. Different types of cover are designed to cover the two distinct parts of any transactions taking place in a rand/ foreign currency transaction.
The importer or exporter can cover a single stage of the transaction or both, depending on the view taken of the currency market. Opting for rand/ foreign currency cover is the most common as it eliminates the entire currency risk.
All FEC’s are subject to national exchange control regulations, which can be explained by your banker.
Selecting a contract
Customers should consider several questions when opting for a specific contract. These questions include:
- Is the payment/accrual date of the underlying commitment determinable, or is there some uncertainty?
- What are the terms and conditions of the underlying contract of sale. Is there any uncertainty regarding the adherence to manufacturing and/or delivery dates which could impact on payment/accrual dates?
- Is the currency quoted at a premium or discount?
- Is it likely that the premium/discount will increase/decrease during the life of the contract?
Advantages of FEC’s
Forward Exchange Contracts offer importers and exporters several advantages. These include:
- Catering for diverse commercial and financial transactions for importers and exporters.
- The company is protected against unfavourable exchange rate fluctuations.
- The exact value of the export and import order can be calculated on the day it is processed.
- Budgeting and costing are accurate.
Disadvantages of FEC’s
- Once a transaction has been covered with an FEC, it cannot take advantage of preferential exchange rate movements.
- If an order is cancelled or there is any surplus amount outstanding on a forward exchange, it must be surrendered at the prevailing spot exchange rate, which can result in a financial loss.
- Early deliveries, extensions, surrenders and cancellations during the fixed period of a forward exchange contract are done on a swap basis causing additional administration.
Importers and exporters wishing to know more about FEC’s should contact the Forex Relationship Centre Corporate and Investment Banking Division Standard Bank toll-free at Tel: 08000-FOREX (36739), Fax: 011 378 8060, or Email: Forex@standardbank.co.za
Managing business risk
Although business is about identifying opportunities for growth, the risks and liabilities associated with everyday business cannot be ignored. Taking reasonable precautions to safeguard business transactions, business assets and the key people that build profitability, are essential to securing a settled environment in unsettled business times. Standard Bank follows a customer-centric approach in this arena.
The result is holistic offerings that can be tailored to meet specific business needs. The bank focuses on:
- Appropriate risk transfer
- Optimisation of insurance spend
- Value addition
- Risk retention analysis
- Asset valuations
- Pre-and post-loss surveys
- Post-loss claims preparation and mitigation advice
- Risk management and insurance intermediary service
The bank offers advice on a suite of financial lines products to address the ever changing business environment.
Solutions offered cover:
- Directors and officers’ liability insurance
- Professional indemnity or errors and omissions insurance
- Employment practices liability
- Commercial crime/Fidelity insurance
Bonds and guarantees
Construction and trade guarantees that are written undertakings to answer for the payment or performance of another entity’s debt or obligation.
In these contracts, the insurer undertakes to make certain payments on behalf of the insured client if the insured client fails to make payments, or does not perform its obligations in terms of an underlying commercial contract.
Types of guarantees
- Performance guarantee – issued on behalf of a contractor to a principal that guarantees performance by the contractor.
- Bid bond – issued on behalf of a contractor and guarantees, on acceptance of a bid by the principal, that the contractor has the finances and capabilities to undertake the contract.
- Advance payment guarantee – issued on behalf of an entity who accepts an advance or progress payment from a beneficiary for the future fulfilment of the terms of a contract. A refund of the progress payment is guaranteed if the entity does not fulfil the terms of the contract.
- Custom bond – issued on behalf of an entity in the freight forwarding industry and is mainly for deferring liability for payment to Customs and Excise of any and all duty due and payable in terms of the Customs and Excise Act.
- Fuel guarantee – issued on behalf of an entity (such as a retailer) to cover the cost of items purchased from a fuel company, such as fuel products and lubricants. The guarantee allows the entity to trade on a debit payment system, as opposed to pre-payment in the form of cash or bank guaranteed cheques. Entities can replace their existing bank guarantees with a fuel guarantee, releasing capital, which can be reinvested in the business.
Industries and sectors in which Standard Bank is active include:
- Construction and engineering
- Retail and wholesale
- Real estate
- Public sector
- Architects and engineers
- Energy and renewable energy
Range of insurance classes
- Business interruption
- Liability/ causality in which the following categories of cover are available:
- Public and products liability
- Environmental impairment liability
- Construction public liability
- Product recall insurance
- Contractors all risk – covers all types of building and civil engineering construction.
- Plant all risks – covers loss of or damage to plant used in the construction industry (mobile cranes, tower cranes, bulldozers and smaller plant).
- Public liability attached to contractors and plant all risk.
- Erection all risk – provides cover for transit and erection followed by commissioning of all types of machinery or equipment.
- Machinery breakdown and interruption – caters for sudden and unforeseen electrical and mechanical breakdowns and the resulting loss of profits.
- Deterioration of stock – covers stock deterioration resulting from machinery breakdown.
- Electronic equipment – loss of or damage to electronic equipment, including computers, servers, PABX systems, portable equipment and IT infrastructure.
Cargo is covered while in transit, whether by means of international and domestic sea, air, road or rail transport. Insurance covers both imports and exports.
Types of cargo insurance:
- Open marine cover on an annual basis
- Stock throughput
- Once-off marine
- Inland transit
- Freight forwarder’s liability
- Carriers liability
- Containers liability
- Stevedores liability
- Charterers liability
If you are an existing Standard Bank client with a Business Current Account in place, and you are interested in enquiring about Standard Bank’s solutions, then please contact your appointed Account Executive.
Alternatively, for more information or if you are new to the bank and are interested in our business savings and investment solutions and business liability services and solutions, please contact Standard Bank.