Looking for a bank is dry, boring work. There are fewer banks now than ever before and it seems that they all offer the same privileges. However, don’t just get involved in anything, take time and be wise. Oh, and double your efforts – because when running a small business, it’s important that you separate your corporate finance and personal finance. This is not only necessary for accounting and taxation, it makes it easier to manage money.
Businesses may also need to add some features to their accounts. For example, some business accounts are created specifically for international traders and are trading in different currencies.
The good news is that looking for a good small business banking option is not 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 is a fee?
One of the things you’ll want to consider when shopping for small business banking is the fee structure. Not all banks are created equal here, so make sure to collect the numbers based on what you need.
For example, if you’re going to make multiple international bank transfers, you’ll want to consider each bank’s fee for that.
You will also want to consider any other fees such as account maintenance fees, deposit fees, transaction fees, etc. These little things can actually accumulate over time, so make sure to choose the account that best suits your specific situation.
What are trading limits?
Trading limits relate to fees, but they are worth their own share. Different small business bank accounts have different transaction limits. For example, you can make 5,000 transactions per month for free. Anything on it comes at a cost.
You’ll want to see how many transactions per month on average and then make a decision based on what the bank allows you to make before you charge you.
What are deposit limits?
Just like small business banks with transaction limits, they can also have deposit limits. Similar to the transaction limit, you are allowed to place a deposit amount before being charged. If you are making more deposits than trading, then you will probably want to find small business banks that allow 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 needed. Some banks are more open to business lending than others, so if you want the option to borrow money, look for those that can help you do that.
How do I access your account?
In this day and age, it’s important that you can access your account from anywhere. While most banking institutions offer online banking services, not all of their systems are created equal. You may also want to consider whether you can send checks from your smartphone.
Another important aspect is how easy it is to perform important functions such as paying suppliers and paying wages. If you want to do these things automatically, look for a small business bank that lets you do so.
What are your preferences in banks?
Just like personal banking, when it comes to small business banks, people have different interests 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 organization.
Other business owners prefer to keep it small and local. For example, if you run a predominantly local business, you may know that local banks are more at peace with what’s going on with the local economy.
Each has its own pros and cons, so consider carefully before choosing a bank.