How to choose the right bank for your small business?
When you are first starting out in business you don’t know what you don’t know. There are so many decisions to make, and banking probably doesn’t seem like a big decision. You will probably go with who you have your personal banking with. But your banking choices can lay the financial foundations for your future financing opportunities. You should at the very least be looking for a bank that is supportive and reliable.
Here are a few tips on how to choose the right bank:
1. Know your needs
Consider what your immediate needs are and what you think you might need in the next couple of years. For instance, do you need day to day transaction support? Merchant support for taking payments? What about a line of credit or a small business loan? Make sure you write down all of the needs that you have and then benchmark prospective banks against those needs.
2. Comparing Features
Once you know what you are looking for review several banks against these needs and benchmark their features. Call them or visit their websites to review additional services, fee structures and interest rates. Create a list of questions (much like and interview) and then set up a meeting with the local business banker for each bank. You also need to consider what service options you want and need. Some people are happy just having online tools, while others like to be able to go into a branch and speak to someone directly. Don’t forget accessing cash and what your needs are, for instance the variety of ATM options available.
3. Size Matters with Lending
At some point as your business grows you will need some form of lending. Whether it is to fund a new product, pay for stock, a store fit, new equipment or even just to lease a car. Make sure your bank is going to be able to fulfil your needs for lending in the future.
4. Review and reevaluate
Choosing a bank is a big decision, but don’t make it a lifelong one. Be vigilant and review your banking regularly. Your needs and the bank products change regularly and you need to ensure that what you need and what you have are still aligned. Banking is a competitive area of business so there are often better deals to be had, so reviewing regularly can ensure that you are receiving the most cost effective services.
A bank should be a key business partner. Choose wisely so that you can reap the benefits of a strong business relationship. Ensure that when you do choose your bank that you nurture that relationship so that your business is held in high regard with the bank and this will help you with your future needs whether it is a discounted rate or help getting a loan approved.
Do you need experts help?
We are experts in helping our clients with reporting required for banks and with relationships across all major banks we are only too happy to help you navigate this relationship. Speak to our team if you need assistance.