How to Find a Proper Bank for Your Small Business

Once upon a time, banks were places that businesspeople used for receiving and sending money. As time passed by, the number of SMB-friendly services provided by banks has increased. Today, there are dozens of services every bank offers to small businesses.

Still, not all of them target all sorts of enterprises. Because of that, SMB-owners should do their homework and conduct research on a variety and banks, to find the one that will suit their needs.

We’ve prepared a concise, but informative guide that should help you narrow down the number of candidates and score the right bank for your venture.

Take your time to shop around

When you’re looking for the best bank for your business needs, don’t make any hasty decisions. This process requires a lot of time and attention. It can be compared to the most important decisions made in a lifetime, like choosing your spouse, or buying your first apartment.

That’s why you should spend some time shopping around. As you’re weighing the pros and cons of the SMB-friendly banks, you’ll figure out what offers are the most suitable ones for your venture.

For starters, read some practical overviews of bank conditions for small businesses, like the one published by Lendgenius. Such pieces will provide you with a substantial amount of information about their terms and policies. Hence, you’ll see whether or not they meet your demands and vice versa.

Further, when you narrow down the list of potential candidates, go and visit their staff members specialized for small businesses. Make appointments with several SMB-bank officials and see what they’re offering to your small business.

This comprehensive approach will sooner or later yield one or two names that will be closest to your small business needs.

Inquire about online banking services

According to the study published by Small Business Administration, about 30 million US small businesses employ about 48% of American workers. Due to the development of the Internet and numerous online services, a growing number of business owners are seeking for smooth online banking solutions.

This is something you should take into consideration when you’re choosing your bank. In line with that, make sure that you choose a bank that provides a substantial number of e-banking services. This package should include paying your business bills online, as well as making payments to other businesses, both local and international entities.

Further, if you want to accept credit card payments, you’re going to need an Internet merchant account. Fees can vary significantly from bank to bank for this type of account, so do some research and correspondence in order to make the most out of your online payments.

Apart from that, modern business owners usually want to integrate their banking data with their business accounting software. This is a smart thing to do in order to ensure seamless tracking of your business transactions, due payments, risky clients etc. So, don’t forget to ask the representatives of the banks you’re negotiating with about the level of integration they allow for.

Ask about the account packages

Opening a business account in a bank is only the tip of an iceberg. Contemporary small business owners need more and more services as their workload starts piling up.

Because of that, you should talk about various account packages when you’re searching for the best bank.

For instance, you might need a savings account, where you can put aside the assets you reserve for future investments or taxes.

Further, if you want to offer your business associates and clients a variety of payment options, your business account should be connected to several online payment solutions. Also, ask about the aforementioned merchant account and the fees for it.

Finally, as your business keeps growing, you’ll have a greater need for managing payroll features via one of your business accounts. It would be wise to ask in advance about these terms and check if those banks offer such services in the first place.

Mind the size and influence of the bank

When you’re choosing the best provider of banking services for your business, it’s important to take into account their size and influence.

First and foremost, you shouldn’t get carried away with the popularity of renowned banking brands. Sometimes a small business owner will get better conditions in a smaller, SMB-orientated bank than in a well-known financial institution.

Moreover, you need to define the scope of your business. If you’re an offline business, aiming at the local community, establishing a collaboration with a reliable local bank might be the best solution. Such a provider will estimate your small business from a different point of view and come up with the best options for your local development. Also, you can always pop down to their premises in case you need things done immediately.

Large banks, on the other hand, might offer a wider range of services for small businesses, but they usually target such ventures in a less personalized way.

However, big names are usually perceived as less exposed to the financial risks of the market.

To cut a long story short, a local should be given an advantage when you’re trying to do something economically valuable for the local community. Similarly, you should opt for a more influential bank if you’re aiming at bigger markets or more demanding banking services.

Double check the transaction fees

The issue of transaction fees is one of the crucial aspects when it comes to choosing the right bank for your business.

No matter what the bank officials tell you about their fees, always read the small print in their brochures and business offers. Of course, an honest banker will be transparent about every sort of fee, but sometimes they can make a mistake, as well (ahem!). This is why you should always double check everything you sign before it’s too late to make any amendments.

If you oversee any such fees, you might end up paying more than you expected for different transactions. This is especially the case with payments made in international currencies. Here you should be careful when it comes to exchange rates and commission fees.

After all, even if you don’t notice any additional fees, you can always make such transactions via PayPal or other similar gateways.

Conclusion

Banking services are of great importance for a small business owner bank. Be it a set of account features, a loan or general terms and conditions, your collaboration with that financial institution will determine the course of your business. That’s why you should apply the proverb “measure twice, cut once” when you’re choosing your bank. This guide should help you cover a wide yet general range of elements important for a small business banking. As a result, you should be able to find a bank that suits at least most of your SMB-banking needs.

Mark Thomasson
Mark is a biz-dev hero at Invoicebus - a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.
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