When running a business, be it a B2B or B2C, an offline or online store, one of the things an entrepreneur should have is a business bank account.
The finance aspect of any business is always one of the most important that every entrepreneur should never take for granted. Remember too that while you may already have a personal account, choosing one for your business comes with different considerations from that of your business’
To start with, when choosing a business checking account, you need to consider your future expected business needs and not just your current needs. A good bank account can help you in putting your business finances in order. In turn, your business can gain access to financial products that can help to expand and grow the business.
There are a ton of banks in the market, which only makes the choice of what to use even more confusing. This fact is precisely why it’s very important that before you head out and sign up with a bank, you already know what it is you’re looking for from them.
To help you out, here’s what you must consider when looking at the best business banks.
Assess Your Banking Habits
The best way to understand your business banking needs is to examine the financial history in the last 6 to 12 months. This is if you already have an established business. For new companies, look into the 6 to 12 months financial projections. This information can help you project a few factors.
They include:
- The amount of cash you may have at hand monthly.
- The amount you spend monthly.
- Credit card transaction values.
- Whether your business needs additional capital like a line of credit or a loan.
In turn, you can use this information to determine what you need from the right bank. It’s best for you to know these ahead of time so that you don’t end up disappointed later on that your chosen bank isn’t meeting the needs that you have for your business.
Features Offered
Every bank has its unique features. Ideally, it’s better to consider a large nationwide bank for your business. These banks provide a more significant range of services and products as compared to local credit unions or local banks. Big banks also offer more perks, lower fees, and you enjoy a nationwide banking network and ATM services. Additionally, modern banks like Monzo offer a much more sophisticated business banking experience.
Even so, larger banks offer less personalized services as compared to smaller, local banks. If you run a local business, you’re more likely to get better services from your community bank. These small banks offer more flexibility for loan applications and can provide waiver benefits under excruciating circumstances. Small banks are more interested in building a relationship with the client.
Do You Need Branch Banking Or Online Banking
Advancements in technology have made it possible for most banks to offer online banking facilities. Other banks strictly run their operations online. These banks give you the convenience of electronic money transfer, mobile check deposits, and also online bill payments.
Even with the convenience of online banking systems, sometimes it may not apply to your business. If you deal with handling more cash than digital transactions, it is best to choose a bank with a physical branch. It is also a better idea to physically go to a bank branch when planning on taking out a business loan. Face to face relations can significantly improve your chances of getting a loan.
Comparing The Fees
Almost all banks charge fees for business accounts. Among all other factors, you’ll need to factor in the fee schedule as well. Else, you might be losing much of your profit earned by simply fulfilling bank fees and charges.
The trick is finding a bank that has the lowest fees rates but still offers cutting edge services and products at reasonable prices. Most banks allow you to deposit funds for free up to a specific limit. Deposit fees are charged when your deposits exceed this amount.
Some banks also limit the number of transactions an account can conduct. You are charged for any extra transactions above this limit. The key is to find the most flexible one for your business needs.
Here, it’s very important that you take the time to sit with the bank personnel or representative, so you know every single fine print that comes along with opening an account with that bank. Take down notes, if you must. In doing so, you can also make your own comparison or ascertainment before making that final decision.
Earning Potential
Even with a business account sometimes, it is possible to earn interest from your account. This feature is especially valuable to entrepreneurs who deposit large amounts of money in their accounts. An interest-earning account allows your money to multiply, which is a bonus if you have large amounts in the account.
Some banks will offer interests on deposits. Just ensure you check that expensive banking fees do not offset these interests.
Visit A Branch
When considering a physical bank, it is best to visit the bank before committing. Take the time to discuss the type of business you run and ask for recommendations for the best account choices. Ask for information about their services and products.
Visiting a bank is also a good way of knowing whether it is the right fit for your business. Because you will be working a lot with the bank, it is best to build a good rapport.
Check Your Credit
Especially when you’re still starting your business, you may need a little bit more credit for your capital. While there are so many banks out there for you to choose from, not all of these are created equally, as they all have their respective strengths as to their features.
Because this is a bank account, your credit score is also very important to start with. If you wish for a larger credit amount, then you may want to sign up with a large bank. A smaller credit line will be fine with smaller banks.
Customer Service Ranking
Every bank has its advantages and disadvantages. You only need to ensure that the good outweigh the bad if you want to get the best fit for your business. Checking the customer service ranking of the bank will tell you everything you need to know about their services.
You can check for bank customer service ranking in the major online ranking sites.
Parting Word
With the tips above, you should now be more assured that the bank you’ll be signing up with, is that which is the perfect match for all of your needs. If choosing a bank for your personal purposes was hard enough, all the more that this difficulty comes in with a business account. Don’t just immediately sign up for that very first bank that you come across with. Knowing exactly what it is you’re looking for and expecting from a bank can help you make a more informed decision. Keep these criteria in mind.
