Choose The Best Business Bank For Your Small Business

How do you choose the best business bank for your small business? It's important to get it right. Your bank can make handling your money a pleasure or a nightmare. It can help you stay profitable or be a black hole that devours your money.

How do you open an account for your business? I'm writing this article in the United States. Different countries may have different rules. In the US, since 911, laws were made to assure that a business isn't merely laundering money for funding international terrorism.

You'll need to provide documents to your banker. The least you'll need is your social security or other taxpayer number, business license (if applicable), and documents from state proving you've applied for your chosen business entity.

First let's look at some daily details of business banking. Picture yourself running your business. You're busy. What things about banking will be important to you? Here's some things to think about-

  1. Is the branch you'll use most often conveniently located?
  2. Are there other branches available?
  3. When is the bank open?
  4. What are the basic bank policies?
  5. When you deposit money, how long before it's available to you?
  6. Are checks free?
  7. Are debit and credit cards available?
  8. ATMs convenient?
  9. Are there fees for using their ATM?
  10. Of course they offer free online banking?
  11. Are there fees for paying bills online?
  12. What's the maximum daily withdrawal limits?
  13. Does the bank offer reasonably priced credit card processing services?

Now lets think about basic business checking and savings accounts. Watch out for fees. They can eat your account alive!

  1. Transaction fees?
  2. Monthly maintenance fees?
  3. Fee if minimum balance isn't maintained?
  4. Overdraft protection offered?
  5. What's the fee for each time it's used?
  6. Fees for bouncing a check?
  7. Are you assesed a fee if you deposit a NSF check from a customer?

Will your business use money orders? Here's a tip- you shouldn't be buying money orders from your bank. The USPS charges much less. So do some convenience stores. Shop around for the best price if you buy them often.

Remember, a bank is a business that needs to be profitable! They make money by selling you products and services, and by collecting fees.

  • Always remember to read the fine print on anything you sign.
  • Avoid signing ANY contracts at all if you can.
  • Don't let a good salesperson sell you more than you need.
  • And don't pay more fees than you have to!

You may look at those last lists and think I'm being pessimistic. No, I'm just being realistic. It's amazing how fast things happen in business. It's better to be prepared for anything that may happen.

Many articles about business banking say to build a great relationship with your banker. That sounds good... but in practice- don't get attached. Choose a bank that has policies you can live with... not a banker that you like. Bankers get moved frequently... here today, gone to another branch tomorrow.

Look for a reasonably caring but knowledgable staff. A willingness to answer your questions is a must. (No eye-rolling allowed!) The place you choose to do your business banking should welcome small businesses like yours and have a small business specialist available to you.

Plan ahead for your growth. What if your business needs a loan? Does the bank offer lending to businesses like yours? Do they work with the SBA for loans?

Would internet business banking work for your business? An online bank is always available & convenient at any hour. But deposited checks can be slow to clear, delaying your access to the money. And it can be hard to actually talk to a real person if problems comes up. (And problems or other glitches can happen in any business.) But still, it's another option to consider.

These are some things to consider when choosing a business bank. Take your time. Interview several banks as if you're hiring them to work for you, because that's exactly what you ARE doing. Choose the bank that will help you be profitable!

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