How To Choose A Bank For Your Small Business
What should a small business look for in a bank? It may seem a simple enough question, but individual banks offer a range of services that can provide support for a business now or later. Selecting the right bank means getting to know an institution capable of meeting your individual needs.
Consider a Local Bank
National banks can have stringent rules and limited access to support a small business. On the other hand, selecting a community bank can empower a business to do more. Specifically, these organizations get to know firsthand about the business, and can see up-close the good work you do. Local banks may be able to approve funding and meet other lending goals with more ease than a national chain.
Know What You Need
Think about the future when choosing a bank for your small business. Right now, you may need a simple checking account from which to operate your company. However, in a few months, you could find yourself needing to tap into investment accounts. You may want to borrow funds to help your business grow and expand. Consider the long-term goals for your organization. Will this bank provide for them? Are the options affordable across the board?
Learn the Details of Each Account Option
Small business checking accounts are a bit different than traditional personal accounts. They typically provide the same basic services, but it is important to consider key features that vary between the two. These differences can include:
- Transaction caps on business accounts: There may be limits on how many transactions and deposits you can make each month
- Fees associated with business accounts
- Availability of funds, depending on the amount of cash and transactions you handle each day, week and month
Compare the bank account features carefully. And in nearly all situations, you will also want to consider the following aspects of your own business:
- Do you have slower periods, during which you may not meet the minimum transaction requirements or account balances?
- Do you have months with higher demand and therefore a higher number of transactions? If so, will that mean you have to pay more in fees?
- Do you use larger transactions, such as significant deposits, and will the bank be able to support these?
The key here is to know that some community banks provide specialized services designed to meet the individual needs of a business. Small-business banks provide a wide range of benefits to borrowers, especially if they are local organizations. You want to be able to get to know your bank and its associates because they should be there to help support you down the road.