Choosing a good bank for your business can be a daunting experience, but for an informed business owner, this should not be the case.
If your need is as simple as business bank account opening or as complex as getting a line of credit, choosing the right banking institution is of great importance. To guide you in making a decision, here are the questions you must ask before settling with one.
Is it small business-friendly?
Many banks specialize in particular kinds and sizes of businesses. Knowing this, it is important to search for one that can accommodate the unique banking needs of companies in your niche and of your size. Learn about the bank’s reputation in your industry and whether or not they have worked with a business similar to yours in the past. In addition, know if they provide financial solutions and advice tailored to the sector/market that you belong to.
What fees does the bank charge?
Fee structure is another important thing to consider when choosing a bank for your business. In some cases, these tend to be vague so it pays to have a clear understanding of the types of fees they charge early on. The most common, however, are service fees, account fees, management fees, withdrawal/deposit fees, ATM fees, and credit card processing fees. Others also charge overage and inactive account fees. Beware of hidden fees that may sum up to a significant expense over time. Find time to know the amount of these fees and compare them to other banks so you can identify the best possible way to save on costs for your banking needs.
What type of services do you require?
There are solutions that are common among most banking institutions. Endeavor to find a bank that offers services that match your business needs. Basic business account services from banks include: checking accounts, savings accounts, credit/debit card, deposit-only card, online business banking, and employee checking accounts. How is their loan process?
While your business may not be in need of a loan right now, always think of the possibility that you might need it down the road. Ask if they offer small business administration (SBA) loans and learn about the interest rates and terms. It also helps if you check their loan process and requirements so you know which can provide you hassle-free assistance for when your business needs financial support.
Does the bank match your cash flow needs?
Ideally, your bank should meet your cash flow needs as it can be a more crucial aspect than profit itself. Many banks have limits on maximum and minimum withdrawal amounts. This is why it is important to assess whether the amount is enough for your business requirements. Learn about the daily, weekly and monthly transaction caps; otherwise, you may end up paying a handsome fine.
What perks can you get from your bank?
Some provide introductory offers, low-interest rates, payroll services, and tax prep assistance to small businesses. Some banks attract new businesses by giving out gift cards and hotel discounts to new customers. While it is not ideal to make a decision solely based on incentives, these perks can help to break the tie between your shortlisted choices .
Start searching for a bank that can be your partner in running and growing your business. Keep the above-mentioned tips in mind so you can find the best one.