What is a Business Sweep?
August 20, 2024
A business sweep automatically transfers (or “sweeps”) excess cash from your business checking account to a dividend-earning account, based on your preferences. This not only maximizes your earnings but also helps you maintain healthy cashflow for your operational needs. Here are 3 reasons every small business should set up business sweeps.
Automated money management
Managing cashflow can be tough. A business sweep automatically moves extra money from your business checking account to a higher-yield savings account. You can set a minimum balance for your business checking account and if your balance goes above this amount, the extra money automatically “sweeps” into a business savings account. If the checking balance drops too low, money is automatically transferred (or “swept”) back to meet your minimum threshold. This ensures your business always has the cash it needs.
Increased earnings
Leaving money in a checking account means missing out on potential earnings. By using the business sweeps feature, your extra funds are always earning dividends. Over time, this can add up and help grow your business’s savings without any extra effort. This means more money for future investments, emergencies, expansion, or just a little cushion for peace of mind.
Lower risk of overdrafts
Overdrafts can be expensive and harmful to a business’s finances and reputation. Business sweeps help prevent overdrafts by keeping your business checking account balance from getting too low. If the balance dips below the predetermined threshold you set, money is automatically transferred in from your savings account to cover the shortfall. This way, you can avoid costly overdraft fees and other consequences of overdrawing your account.
Technology and automation can help take the stress out of managing your business’s finances. You can set up a sweep on your business checking account in digital banking anytime. Business sweeps allow you to easily automate money management, improve cashflow, increase earnings, reduce overdraft risks, and simplify financial tasks so you can focus on the business you love.
Business sweeps are available to RCU Members with a business checking account. Learn more about this useful feature at redwoodcu.org/business-sweeps.
PPP Forgiveness Application Deadline
Congress passed The Economic Aid Act which changed the deferment period from 6 months post covered period to 10 months post covered period. For example, if your covered period ended June 30, 2021, under the new guidelines the earliest your first loan payment wouldn’t be due until April 2022, and you have until then to request forgiveness. Please use the following calculation to help you identify when your forgiveness will be due:
- PPP borrowers may select a covered period anywhere from 8 weeks to 24 weeks.
- RCU is automatically calculating your loan due date based on a 24-week covered period, if you intend on using a shorter covered period please inform us immediately as this will impact your due date.
- Your correct deadline will be reflected in your online banking account.
If all or part of your PPP loan is not forgiven, your first loan payment will be due the first of the following month after a decision is made by the SBA.
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