Every banking institution has the same marketing message these days, either blue-gray corporate power, sunny, hometown simplicity or, ideally, both. But the reality is, some small business banks are good at servicing specific niches and types of businesses; other banks excel at completely different markets. A lot depends, too, on where you live. Banks have consolidated in recent years, but many remain regional entities at best.
When choosing a banking institution for your business needs, it's best to look beyond the marketing at some key indicators of their abilities:
1. Branch banking and personal business banking services.
2. National banking networks and advanced small business bank know-how.
3. Automated banking services to bank online and by phone
4. Fee structures for business banking.
Choose a small business bank for its branch banking and personal bankingFor a small business bank, the best bank is the bank that's nearest or has the most convenient branches, especially if you handle a lot of cash and checks. A local banker is likely to be more aware of your business and its prospects, and there are often personal connections that can help.
Choosing from national business banking networksAs your small business grows, it can help to have access to more sophisticated financing. A large banking institution can be more impersonal but often have departments for medium-sized to large-business banking.
Bank online and use automated banking servicesIncreasingly, if you manage your small business online or use software like QuickBooks, the most efficient means of keeping track of your company's finances is to bank online, using direct deposit and other online-only business banking products directly connected to your banking institution.
Watch out for banking institution feesFees, particularly credit card fees and ATM charges, have spiraled in recent years as banks have competed to bring in customers but then used fees to "punish" other customers out of their system. Review carefully what types of business banking services you actually use and then ask for a printed fee disclosure first.
- If you bank online, make sure you get fees removed. Banks often charge fees for mailing out statements, which they should stop charging if you go all online service.
- Running a restaurant? A lawn service? Busy all hours, all week? Many local banks have begun offering later hours or Saturday service. Ask your banking institution about it.
- Consider automatic bill pay. If you can keep the balance, you save the time it takes to keep up on utilities and fixed costs to suppliers.
- Online banks often feature mobile phone banking and alerts. It keeps you out of the branch but informed nonetheless.