Ever needed to make a purchase? No, we’re not talking about when you need to run down to the store for a jug of milk …unless you’re talking about 100 cases of milk, of course. Indeed, there are purchases… and then there are (italicize “purchases”) purchases. So there are going to be times where you need to change how you pay for the purchases that you really need to make. This actually brings us to the subject of bank drafts, a term that gets used quite a bit.
However, a lot of new business owners don’t really know what a bank draft is, which leads to a little bit of embarrassment when they’re dealing with vendors and other high level types that would expect new business owners to know such things.
Yet you don’t have to feel like it’s the end of the world just because you don’t know one little thing — right? Right! Simply put, a bank draft is just certified funds directly from your bank. Now, you might wonder at first where you would ever need such a thing from your bank, but as you make big purchases with your business, you’re going to need to have a bonafide way of getting them their money. Simply writing a check isn’t going to do you any good — vendors have been burned by checks before. Remember that the number one thing the vendor needs to assure themselves of is that you’re going to be able to pay them the exact amount, and that your payment isn’t going to bounce. The last thing that any vendor wants to deal with is not getting paid by their customers.
Of course, you can step in with a bank draft and point out that you have guaranteed funds. The banks will verify it twice — your bank will make sure that the funds are good, and then the vendor’s bank will also make sure that the funds are good. There are reports of people being shady and putting out counterfeit bank drafts. This only slows down the whole process and makes people think that they’re being had when it could be just a simple delay.
There are some things in life where you need to just come out of the gate shooting straight with people. A bank draft is the key that opens a lot of doors in the business world — especially if you wanted to get into international trade.
If you’re curious about bank drafts, talk to your banking representative. They would be more than happy to help you navigate the process in virtually no time at all!