Tips: How to Choose a Bank for Your Small Business
Banking is one of the first things you’ll need to make a decision about as you get your business up and running. From business security systems to online marketing, everything about your business relates directly to your company’s financial sector. You’ll want to make sure things are efficient and glitch-free. As a small business, choosing a bank can sometimes be daunting. Here are three things to consider when choosing your banking company.
Location, Location, Location
As they say in the real estate world, the most important thing is location. Depending on the size and nature of your business, you may need a bank with numerous locations or a small bank in your immediate area. Location plays an important role when choosing a bank.
- Does operating your business entail numerous runs to a bank in one day? If so, you’ll want to make sure you choose a bank with a branch local to you to cut down on time and gas accrued from running back and forth.
- If your business transactions occur mostly online, location isn’t as important and you can focus on other features each bank has to offer.
- Are you going to need lending? In today’s market, small banks are more likely to take chances on small businesses. If the bank is in your community, they may be more flexible and provide greater customer support.
Online Banking Selections
Regardless of whether you choose a banking corporation or a small business, you may want to choose a bank that provides online banking. Online banking has its perks, but there can be drawbacks if you choose a company that is only online.
- Making the most of online banking can help your company reduce its environmental impact. If your company wants to be as green as possible, online banking can help you do just that.
- Strictly online banking accounts typically pay a higher rate of interest than you can get from a brick and mortar competitor.
- Online banking accounts may save time with the constant use of direct deposit, but because there are no ATMs, depositing checks and withdrawing cash become more difficult.
- Open 24/7, accounts that offer online banking are convenient and allow for constant monitoring of payment and spending. You can catch fraudulent actions quicker than if you wait for a monthly statement.
Figuring Out Fee Structures
As you come closer to choosing a bank for your business, you’ll need to look at the fee structure of each bank. Some charge fees after a certain amount of transactions or for various financial services. Determining what you need and the fees associated will benefit your business in the long run.
- If you’re going to need financial advice and the bank you are considering offers such services, look into the related costs, if there are any. See what extras are associated with your account and which aren’t.
- Larger banking corporations are more likely to issue corporate credit cards to small businesses, which can be used for financing. Rates are also usually less with larger banks.
- Some banks will also charge small businesses for online banking services, even though they do not charge individuals.
- If you will need a loan, what are the rates? You’ll want to figure out what kind of loan you’ll need and the rates associated. Banks often limit loan amounts so asking what each bank’s limit is might be a good idea.
Always ask questions about fees and services associated with your account. Pin down what you need and make sure the bank you choose has those options available. Don’t forget to occasionally shop around. Your business changes and so do the banks’ rates and available options. As your business expands and shifts around, you may have different needs that your current bank doesn’t provide.