When choosing a bank for your small business, there are many factors to consider. While it may be tempting to go with the bank down the street from your office for convenience, they may not offer the best services for your small business or startup. That’s why it’s important to understand exactly what you need from a bank, the services banks can offer a small business startup and the cost of small business banking.

What Do I Need From a Bank as a Small Business?

Every small business will have specific banking needs, and there is no one-size-fits-all option. When you are deciding which bank to go with, it’s good to consider the following:

  • What you’ll use the bank for: The services you need will depend on what you want from the bank. Are you looking to take out a loan? Do you need to set up bill payment? Get a corporate credit card? Is online banking important for your business? Are you hoping for investment advice and personalized service? All of these factors will influence your choice, so knowing what you’re looking for will help you narrow down your options.
  • Small vs. big banks: Larger banks typically charge lower rates for their services and are more likely to issue corporate credit cards. They also usually have lower interest rates on loans and more services to choose from overall. But smaller banks are often more flexible, and may not be as likely to impose stiff fees should your business encounter a slow period. Small banks also usually offer a personal touch that you may not find with larger banks, so you might receive more assistance and attention than you would at a larger bank. If your business has mainly regional interest, a local bank will also better understand your marketplace. Overall, your business needs and priorities will determine what size bank might be the best fit for your business.
  • Money movement: How is money coming in and out of your small business account and how often? How you are paid and when will help determine which bank may be best for your company. For example, if you are receiving a lot of checks and you don’t want to go back and forth to the bank frequently, an option for online banking and depositing checks via phone could be useful. However, if you are a brick and mortar store receiving cash payments and credit card transactions, online banking options may not be as important to your business.
  • Strong relationship: Ideally, you’ll want to find a bank that understands your business and can work with you for the long term. The ideal size and services will depend on your company needs, but whatever bank you choose, you’ll want to feel comfortable and confident in its ability to help your small business succeed.

Bank Services for Small Business

When it comes to banking for small business owners, there are many services to consider. Depending on your business, you may find the following bank services useful:

  • Checking account
  • Online/mobile banking
  • Corporate credit card
  • Savings account
  • Payroll
  • Loans
  • Wire transfers
  • Merchant services
  • Leasing

Some banks may also offer extras with their services. For example, some banks offer business checking accounts that earn interest, which could add a little extra money to your account over time. If you travel a lot, there are banks that offer travel cards which will connect your purchases to frequent flyer programs and travel rewards.

It can also be helpful to work with a bank that can provide all the services you need to streamline your day-to-day operations and accounting.

Cost of Small Business Banking

As you decide on a bank for your small business, it’s important to know exactly what fees, limits and other costs are included with their services. What you are charged and why will vary from bank to bank, but some of the most common fees to look out for include:

  • Transaction fees: Banks may charge for specific types of transactions, such as ATM withdrawals and wire transfers. These fees typically occur each time the transaction is made.
  • Transaction limits: Some banks may put a limit on the number of transactions you can make over the course of a month, and will charge for exceeding that amount.
  • Minimum account balance: Many banks require a minimum account balance and will charge fees if your account falls below that amount.
  • Monthly maintenance fees: Banks typically charge fees for maintaining your account, but the fees can usually be avoided if you maintain a certain balance or have direct deposit set up for your account.

Other fees you may encounter include card replacement fees, paper statement fees, account closure fees, overdraft fees and inactivity fees. Given the amount of possible fees you may be charged, it’s important to be aware of all possible bank fees, as you may need additional services down the line. But fees can also sometimes be negotiated or waived depending upon the bank and your business history, so it’s always good to ask how a bank may be able to accommodate you. Banks will often waive fees when you link accounts and bundle services as a way to incentivize people to do more business with them.

Contact Velocity Management Services Today

Choosing the right bank is vital to a small business. And with so much to consider and manage as a small business owner, you need to invest in services that work best for your business. At Velocity Management Services, we specialize in payment processing, payment equipment and business solutions for small businesses to provide you with easy and affordable options.

Reach out to us today and speak with one of our small business experts to see how our suite of services can be used for your business. We will provide you with a free initial consultation and help you determine what you need.