How to choose a bank
So how do you determine the best option for your business? Small Business Models spoke to a few business banking experts for some important tips.
Check your bank account
Priyanka Prakash, business finance specialist for Fundera, said in an email to small businesses: “The best way to know what you need from your bank is to look at the last 6-12 months of your financial statements. established business). If you have a new business, look at a 6-12 month cash flow forecast. This survey will help you answer many different questions, such as how much money you can expect to earn each month, how much you spend each month, your credit card transaction volume (if any) , and whether you have additional financial needs. capital in the form of a loan or line of credit. This information will help you narrow down what you need from the bank and help you ask the right questions when doing a bank inquiry.
Choose between online banking and branch banking
Today, there are many online banks that offer features that can be useful for small business owners. With these accounts, you can enjoy the convenience of wire transfers, online bill payments and even mobile money deposits.
However, if you're dealing with more money than digital money, a bank with a physical branch nearby may be a better option. Prakash also suggests visiting a bank branch if you want to take a loan, as this face-to-face interaction can improve your chances.
Decide which plan you want
Different types of banks also offer different services. For example, you can get a personalized service from a small local bank or credit union. But you can enjoy better features on national channels. Prakash says, "Big national banks usually offer different products, more benefits and lower fees, and you get the convenience of a large network of branches and ATMs. However, big banks also offer personal attention." personal and small businesses. Small community banks often have close ties to local businesses. This allows small banks to be more flexible when applying, and they will be able to waive the overdraft or monthly fee in a reduced situation.
Arielle O'Shea, banking expert for NerdWallet, added in an email to Small Business Trends: "Don't overlook credit unions, which often have low or no down payments and limits. up on cash deposits.for business checking accounts.
Almost all banks charge some kind of fee. The key is to find debts that don't fit your bank's needs or that you can easily cover.
O'Shea explains, "They usually put a limit on how much you can deposit for free each statement period, and charge fees and deposits that go over. These fees, which are usually around 30 cents per $100 over the deposit limit, can add up quickly.
He added: "They can limit the number of transactions you can make on the account, charging a fee for each additional transaction. You can pay up to 40 cents for each transaction once you exceed the limit.
Check earning potential
On the other side of the spectrum, you can make more money if you choose a bank with a good interest rate for the account. This is especially important for those who hold or invest a lot of money. O'Shea explains: "You can also find banks that pay interest on your deposits - and you can get the money for free, as long as it's not a high rate.
Go to the branch office
Prakash says, "If you are considering a physical bank, I recommend a small business owner to visit the bank in person. You can discuss the type of business you have, products/ your current and future job needs, and have an honest discussion about your average bank balance and credit report. Visiting the bank is also a good way to know if the person is suitable in person. You will be working closely with your bank as your business grows and evolves, so you will have a good relationship with the bank staff.
Talk to other business owners
Prakash explains, “Sometimes all it takes is a conversation with another business owner to find the right bank for you. Try to find a business owner you trust in a company that operates a business of similar size in the same location. If they like their bank, it's worth checking out.
Check the customer service level
If you don't know which small business owners to ask yourself, you can learn more about what customers think about their banking experience by checking out some online resources. Prakash says, "Online ranking sites, like J.D. Power and Associates, rate banks in different areas based on the satisfaction of small business owners. It's a good starting point for small business owners and -don't know where to start. Fundera also ranks the best commercial banks in various categories.
Consider several banks
There is no rule that says you have to choose and stick to one bank for all your financial needs. Some small business owners may find it beneficial to mix and match. Prakash explains, "It is possible that you end up choosing different banks for different purposes. For example, one bank may offer good checking and savings accounts, but another bank may offer loan options." better business. It can work in a business owner's favor to have multiple banking relationships.
Don't be afraid to make changes
You can also switch banks over time as your business grows and your needs change.
Prakash says, “If your bank needs a change or you feel that your current bank is not up to scratch, you can switch banks at any time of the transaction. Don't think you're locked out. Small business owners are the most desirable customers for banks because they tend to have higher deposits than consumers. Because of this, you are in the driver's seat when choosing a bank and are not satisfied.