Guide to Banks for Small Business

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.

Action Steps
The best contacts and resources to help you get it done

Choose a small business bank for its branch banking and personal banking

For 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.

I recommend: Bank of America, Wells Fargo, Citibank, Wachovia and Regions are busy expanding branches with plenty of small business bank products.

Choosing from national business banking networks

As 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.

I recommend: Some of the largest banks in the United States are Bank of America, J. P. Morgan Chase, Citibank, Wachovia, Wells Fargo, Suntrust and HSBC.

Bank online and use automated banking services

Increasingly, 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.

I recommend: Once a competitive advantage, small business banks now routinely offer online banking services. Find out how your local bank ranks in the bank online business by checking its ranking with Gomez.

Watch out for banking institution fees

Fees, 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.

I recommend: Keep track of bank fees through Bankrate.com, which does regular "roundup" coverage of the trend and offers this complaint form. CNNMoney, too, has a good fee-by-fee guide to fighting back against a banking institution.

Tips & Tactics
Helpful advice for making the most of this Guide

• 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.

The official source of Banks for Small Business is the Banks page at Business.com