How to Pick the Best Bank for Your Small Business
This is a writing sample from Scripted writer Ester Deluna
How to Pick the Best Bank for Your Small Business
It can be difficult to choose a bank, especially when you're just starting out. Anything that involves the word 'banking' might seem a little overwhelming at first, especially since you have to consider a lot of things — the range of services they provide, the fees they charge, and the different ways they market themselves. So, how exactly do you decide?
Here at Scripted, we've identified the best practical strategies that could help you in your decision. This guide will tell you everything you need to know about choosing the best small business bank.
Think about what you do
When it comes to choosing the best bank for your small business, you can't pick a bank because of its popularity or because it was endorsed by a celebrity you really like. The first thing you have to consider is the nature of your business. What are the services or products you offer, or what are your specific business plans for the future?
According to business finance expert Priyanka Prakash, "If you have an established business, the best way to know what you need from your bank is to look at the last 6-12 months of your financial history. For brand new businesses, you can look at 6-12 months of your financial projections." Once you've assessed these things, you'll be able to identify what are the specific things you need from a bank.
Check out the services each bank offers
Once you've narrowed down your banking needs, you can use this as a guide when checking out the different services each prospective bank can offer. You don't have to limit yourself to one or two prospects. Try searching for banks that specialize in services that match your needs. You may either check out their website or try calling them to request specific information. Whatever you prefer, make sure that you ask them if they also offer additional services outside of your small business needs and how much their fees and interest rates are.
Consider the location of the branch nearest to you
If you have a physical store or a business with different branches, then another thing you have to consider is the location of the bank you intend to choose. Even if a bank can offer all your banking needs, if their nearest branch will still require a 2–3-hour drive or commute, you'll probably have to find a different bank. Just imagine all the time you could end up wasting or saving, because of the location of the bank you have chosen for your small business.
This aspect is also very important, especially if you intend to make regular revenue deposits and if face-to-face transactions are part of banking practices.
Learn about their online banking system
Everything requires an online presence these days. Even if, at first, you haven't specifically decided if you'll be offering your products and services online, you still need to consider this for future references. Ultimately, there are benefits and reasons why your business needs to get online, which is why learning about the online banking system of your bank is essential.
If you are running your small business virtually, you may also consider online banking and assess whether your products or services would be much better suited for an online banking system than traditional banking for your small business.
Find out about their products and services for your business
Different types of banks offer varying products and services. In this case, you have to specifically assess the products and services that are perfect for the nature of your business. If you only need products that fall under retail banking–like deposits, loans, and book-keeping–then you don't have to stress yourself too much with finding a highly-sophisticated bank that offers high-end banking services. If the nature of your business is more online, you'll have to look for a bank that can provide the best security in terms of online banking.
Consider special perks and discounts
More often than not, banks also offer special perks and discounts. Other banks offer free travel rewards and cashback offers, especially if you've also availed of their credit services and products. There are also banks that give you the option to open subaccounts which could help you organize your savings. Other than allowing you to open subaccounts, there are also banks that have money management tools built into their banking applications. These things could make a difference in your decision, especially if certain perks and discounts can easily be availed of within the scope and nature of your small business.
As you can see, there are a lot of things to consider when choosing a bank for your business. Hopefully, this guide was able to help you understand the most important aspects of banking before you decide to choose the best bank for your small business.
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