5 Key Factors to Choosing the Right Business Bank

One of the most important decision a small business owner must make is whether or not a business bank account is necessary.

No matter the business model of your fledgling company, your company can benefit from opening and managing a business bank account. Not only will it give you access to a business banking manager (who can advise on all things financial), but it’s also important for clean and accurate bookkeeping and tax returns. Not to mention, it ensures your company separates business finances from personal ones.

But there is no one-size-fits-all business bank account for every business. Each small business will bring something different to the table and will require a financial institution that can match their requirements. So how do you choose the best bank to open a business account with?

Here are five factors to consider when choosing the right banking institution for your business.

1.  Funds Security

Until the 2008 financial crisis, few people could have imagined that banks could be subject to failure. But that’s exactly what happened to Washington Mutual Bank. The financial crisis caused Washington Mutual to cease operations before the end of 2008, causing the largest bank failure to date.

Despite this, none of their customers, both business and personal lost any of their money. How? Federal Deposit Insurance Corporation (FDIC) insurance.

When sourcing a bank for your business requirements, make sure that the bank or credit union you select has FDIC or National Credit Union Association (NCUA) insurance. While bank or credit union failure may not occur, such protections ensure your money doesn’t disappear once your financial institution goes belly-up.

2.  Bank Fees

Fledgling businesses want to save as much money as possible. It’s important that businesses try to minimize expenses as much as possible. One of the ways to ensure you squeeze out every penny from your accounts is by choosing a free business bank account.

Like many other bank accounts, business bank accounts carry a load of fees to operate such accounts. Examples of fees could be:

• Monthly
• Minimum balance
• Transactional
• Wire transfer
• ATM and cash deposits

Free business bank accounts minimize these fees to zero if certain conditions are met.

Take time to do some comparison shopping to find the right bank for you. Location and size matter just as important as minimizing banking fees. Your business needs will extend far beyond a bank’s fees, so it’s important to keep that in mind.

3.  Advisory offering

Banks of all sizes emphasize customer service, but as a small business owner, you want more than just customer service. You need a strong relationship and partnership with your account manager.

When factoring the right bank for your business, seek out banks that allow their local branch managers lending authority without requiring the need to check with the powers that be.

Smaller, more local institutions have more discretion when it comes to lending authority than those at big institutions.

Ensure the bank you select has decision-making abilities and a wide range of services to ensure they have the authority to meet your requirements and demands.

A bank that understands your loan requirements and business creditworthiness is one that can provide quick problem-solving solutions to ensure your business’ finances never skips a beat.

4.  Ease of accessibility

A valuable tool for small business owners is the ability to bank on-the-go. While brick-and-mortar branches are still important thanks to their invaluable interpersonal customer service, it’s important to have the ability to make deposits or transfer funds from anywhere.

Small businesses should seek out banks that provide a variety of tech solutions to make banking convenient. Banks that provide tech solutions such as online and mobile banking simplify business operations for small businesses. This allows them the ability to keep track of all business transactions and account balances, as well as managing banking needs on-the-go.

5.  Future business needs

A key factor to look for in a banking institution is its ability to match the scalability of your business. In its fledgling days, your business may only require a basic checking account. But as your business grows, you may notice that it requires more than just the basic depository accounts most banks provide.

You need a financial institution that offers solutions for the growth of your business. This can include services such as small business loans, a corporate credit card, merchant services, lines of credit, and so forth. Invest in a bank that considers the future of your business and its growth.

A long-term business relationship with your bank is integral to the success of your business. The basis of trust that’s fostered in a long-term business relationship makes it easier to do business, particularly if you need to seek financial advice or financial help.

The right bank for your small business will be the bank that works as hard for your business as you do. Your business needs will change as your company grows from its fledgling state into a midsize firm. You need a bank that will understand that evolution and growth and will provide the financial services and support that will help keep your business thriving at every step of the way.