How To Choose A Bank For Your Small Business

How to select a business bank
Have you chosen the appropriate bank for your small business? Image: Flickr

Are you wondering which bank to turn to for your banking needs and financial goals?

Selecting a bank goes beyond opening a new account or choosing the branch office closest to your company.

Picking a bank for your small business can be a frustrating and overwhelming process.

However, it can also affect your success considerably.  Whether you find yourself with insufficient or excess options, it’s imperative you make an effort to locate the bank that suits your business needs.

While every bank may offer something beneficial, determining the right institution requires planning. The best way to achieve this involves the identification of important factors. Here’s a guide on what to consider.

Convenience

You may locate the perfect institution, but if it has a restricted number of locations and is nowhere near your home or work, it wouldn’t make sense opening an account there.

Similarly, if you’re constantly on the move, opening an account with online capabilities is perhaps a good idea. Large institutions typically have more locations and tech-savvy choices. However, smaller institutions frequently offer more personalized service with lower or fewer fees.

Bank Size

Developing a relationship with your bank has merits, particularly for startups. When you require money fast, a smaller community bank could make it happen quickly.

Such a bank will go beyond examining your balance sheet. However, a larger institution may provide improved interest rates, more flexibility in terms of loans, and a larger product offering to meet your needs.

A small bank isn’t necessarily friendly and interest rates differ. If the interest rates are your main focus, examine all banks and bear in mind that you can negotiate rates and fees.

Fees

Ask upfront concerning the charges associated with the most-needed services. Avoid being obsessive with charges, because the institution is merely charging for the services it’s providing.

If bank fees affect your business’s profitability considerably, this isn’t a good sign. Nevertheless, business-oriented institutions can typically conduct an analysis and propose a particular group of services and products together with an approximation of charges after obtaining copies of recent bank statements.

Some banks provide savings and checking accounts at no cost while others need a minimum balance to waive any charges. Fee structures can differ considerably across banks.

Therefore, it’s imperative you read the fine print before you open an account. Even small charges can accumulate over time and affect your account balance, so examine the fee schedule carefully before signing, and ensure you comprehend what you must do to avoid charges.

Banking Needs

Recognizing your personal needs is vital when trying to locate a new institution. Developing a list of the economic features that you find important is a good way of achieving this.

Similarly, though some features may sound appealing, it’s also important you consider how often you’d use them. For instance, if you expect to access small loans, you’re more likely to focus on its lending practices than the type of investment instrument it provides.

Bank Compatibility

Customer service and personal compatibility are intangible elements of every bank that you can’t underrate or overlook. If your personal connection with your institution is good, there’s a high likelihood that you’ll forge a thriving working relationship.

Line of Credit

Numerous small businesses require money from time to time and most institutions provide this in the form of a revolving credit line. It’s comparatively easy to get approval when you form a new relationship with a bank because they want your business.

Online Services

Most financial institutions permit small business proprietors to view account details online without any special connections or software.

Final Thoughts

The decision on which bank to select typically depends on the immediate need. However, you should consider other factors when determining which institution to select. A large part of your monetary life will revolve around your banking relations, so it’s worth conducting some research.

Dailey Bookkeeping Services is a Xero Certified Bronze Partner and a QuickBooks Online Certified Advisor, so if we can help you with your business needs, just give us a call, we would love to help you!  The owner, Jacqueline Dailey is a Certified Public Bookkeeper, an Advanced Certified QuickBooks and QuickBooks Online ProAdvisor, a Sleeter Group Certified QuickBooks Consultant and a Xero Certified Bronze Partner. We work remotely so we can work with any company located in the U.S. If we can help you with this process or provide you with custom reporting, please give us a call. If we cannot help you, we will refer you to someone who can!  Feel free to visit our website at http://www.daileybookkeeping.com.

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