Discover How Treasury Optimization Helped an International Office Supplier Reduce Bank Fees by 45%
April 20, 2022
At a glance
- Take stock: There may come a point in your business’s growth trajectory in which you need to re-evaluate your current banking fees and services.
- Save more money: By reassessing and renegotiating with its bank, Carolina Wholesale achieved a 45% reduction in banking fees, plus a best-in-class interest rate on a $25 million line of credit.
- Next steps: An independent, third-party professional can be a valuable resource to bridge communication and negotiation with your bank when re-evaluating fees. Aprio’s Treasury Optimization Services Team can help.
Schedule a consultation with an Aprio advisor.
The full story:
When was the last time you gave your bank service fees a second look? Amid the hustle and bustle of running a business, it can be hard to find time to take stock of your current situation. But if you’re preparing for a major business event — for instance, a new product launch or a new loan to fund a business expense — it’s worthwhile to re-evaluate your entire financial picture to see where you can adjust.
Aprio’s Treasury Optimization Services Team recently helped a business navigate this process and provided the negotiation support, data analysis, research and benchmarking needed to help the organization secure a more suitable fee structure with its current banking partner. Aside from achieving greater cost savings, the process also helped strengthen the organization’s relationship with its current bank as it prepared for a new phase in its growth lifecycle.
We provide an overview of this success story in the third segment of our three-part series, which explores how businesses can strengthen or develop banking relationships that allow them to resolve challenges, tackle new opportunities and set the stage for long-term success.
Meet the client: Carolina Wholesale
Since its inception more than 40 years ago, Carolina Wholesale has grown into one of the largest office machine and office supply distributors in the country. The company offers a breadth and depth of products, including copiers, printers, fax machines, shredders, calculators, typewriters, dictation/transcribing tools, telephones, presentation equipment, paper handling, cash registers, time clocks and supplies for each. Carolina Wholesale serves all 50 states, plus Canada and Puerto Rico, and carries over 10,000 active items representing over 100 manufacturers.
Carolina Wholesale came to Aprio for help with reassessing its current bank fees; the company also was looking to renew its $25 million line of credit to support its growth strategies. Carolina Wholesale had a 20-year relationship with its current bank, with hopes to continue that relationship as it pursued new opportunities and services. However, the company’s CFO wanted to get a better sense of the market.
Aprio initiated a comprehensive research, data-gathering and due diligence process, and received proposals from 10 different banks for Carolina Wholesale’s review. The team reviewed the proposals from each of the banking candidates and compared that data with the proposal Carolina Wholesale received from its current bank.
The existing bank’s proposal was not as favorable as the other offers the company received. However, Carolina Wholesale valued the deep relationship it had built with its current bank and still had reservations about leaving it for a new provider. With this in mind, Aprio went back to Carolina Wholesale’s current bank with the goal of negotiating a new agreement. Aprio analyzed Carolina Wholesale’s current interest rate in its term sheet, unused fees, upfront fees and legal fees to gain a better understanding of the current picture.
After comprehensive negotiations and analysis, Aprio helped Carolina Wholesale secure a best-in-class interest rate on a $25 million line of credit from its current bank, which enabled the company to fund expenses necessary to its growth. What’s more, Aprio was able to reduce Carolina Wholesale’s fees by 45% and work with the bank to eliminate upfront, legal and closing fees. Not only did Carolina Wholesale get to stay with its current bank, but the company saved $150,000 the first year of the new agreement and $100,000 in years two and three.
The bottom line
Many companies choose Aprio for their Treasury Optimization needs due to our team’s breadth and depth of industry experience. In this case, our specialists were able to preserve Carolina Wholesale’s existing banking relationship by serving as an independent third party — one who could bridge the communication gap, provide negotiation and analysis expertise, and offer support to meet the company’s current and future goals.
Aprio’s Treasury Optimization Team is committed to improving our clients’ banking relationships, while enhancing their profitability and finding solutions that can better suit their needs. We also provide competitive benchmarking services that allow you to compare your fees to industry averages to secure the best possible rates.
In the meantime, reach out to Aprio to schedule a consultation if you’re interested in getting a second opinion on your bank service fees.
About the Author
Tim partners with clients to negotiate lower banking fees and structure their treasury functions to save money and maximize profitability. Through data analysis, Tim identifies opportunities for savings across transaction fees, foreign exchange fees, deposits, commercial card rebates and merchant processing fees. Before joining Aprio, Tim spent 23 years in banking operations and treasury sales. Recognizing a disconnect between customers and their banking institutions, Tim created his unique treasury optimization service model to help Aprio clients maximize their business banking and financial relationships.