Looking for a bank is dry, boring work. There are fewer banks now than ever before and they all seem to be offering the same perks. Don't just go in for whatever, though, take your time and be discerning. Oh, and double your efforts - because when running a small business, it’s so important that you keep your business finances and your personal finances separate. Not only is this necessary for accounting and taxes, it makes managing money easier.
Businesses may also need some more features in their accounts. For example, some business accounts are made specifically for people who do business internationally and are dealing with different currencies.
The good news is that looking for a good small business banking option isn’t that much different than looking for personal banking options. You’ll still want to look at fees and features, you’ll just want to do it through the lens of your business needs.
What are the fees?
One of the things you’ll want to look into when shopping for small business banking is the fee structure. Not all banks are created equal here, so make sure to crunch the numbers based on what you need.
For example, if you are going to be doing a lot of international wire transfers, you’ll want to look into what each of the banks charge for that.
You’ll also want to look at any other fees such account maintenance fees, deposit fees, transaction fees, etc. These little things can really add up over time so make sure to choose the account that works best for your particular situation.
What are the transaction limits?
Transaction limits are related to fees, but they merit their own section. Different small business banking accounts have different transaction limits. For example, you may be able to do 5,000 transactions per month for free. Anything above that is subject to a fee.
You’ll want to take a look at how many transactions you have on average each month and then make your decision based on what a bank allows you to do before charging you.
What are the deposit limits?
Just like small business banking has transaction limits, they may also have deposit limits. Similar to transaction limits, you’re allowed a set number of deposits before you’re charged a fee. If you’re doing more deposits than transactions, then maybe you’ll want to find small business banking that allows for a high number of deposits.
Do they have lending authority?
Many small businesses may want to do business with a bank that can lend them money when need be. Some banks are more open to business lending than others, so if you want the option to borrow money, look for banks that can help you do that.
How accessible is your account?
In this day and age, it’s important to be able to access your account from anywhere. While most banking institutions offer online banking, not all of their systems are created equal. You may also want to consider whether or not you can deposit checks from your smartphone.
Another important aspect is how easy it is to do important functions to like paying vendors and doing payroll. If you want to do these things automatically, look for small business banking that allows you to do so.
What’s your preference in banks?
Just like with personal banking, when it comes to small business banking, people have different preferences based on what they feel comfortable with. For example, some business owners may love the bells and whistles that come with banking with a large institution.
Other business owners prefer to keep it small and local. For example, if you run a business that is primarily local, you may learn that local banks are more in tune with what’s going on with the local economy.
They each have their advantages and disadvantages, so make sure to consider them carefully before choosing a bank.