Banking is crucial to smooth financial operations in any business. If you are about to start a new business, the first step is often opening a separate business bank account. However, selecting the bank for your business can be arduous because it requires several levels of assessment. Most business owners make the mistake of merging their business and personal bank accounts at the start of their businesses. This can lead to serious miscalculations in business finances, which is why experts suggest keeping personal and business finances separate right from the start.
There are several things to consider while selecting a bank for your business operations. Here is a thorough guide on evaluating which bank is best for your business needs.
- Identify Your Needs: The foremost step is understanding what you need for your business banking. Many businesses only need bank accounts for receiving and making payments which are relatively simple, and most banks offer seamless services. Many other companies may require an uninterrupted credit line, bank loans, leasing options, and corporate accounts for their employees. Depending on the requirements of your business, evaluate the features offered by various banks near you and open an account in one that suits your business needs best.
- Evaluate Banking Features: Once you have identified the needs of your business, the next step is to evaluate the business banking features offered by the bank. Some basic business banking features you might want to evaluate include a checking account, savings account, deposit-only card, online business banking, credit and debit card facilities, employee accounts, and business loans. Evaluate the quality of each of these services’ quality and the associated surcharges. Similarly, compare the service quality and charges between different banks. Select the bank account accordingly, depending on how much you want to use each of these services.
- Future Business Loans: Business owners often acquire loans from banks for the purpose of operation expansion or simply to pull their businesses out of serious debt. To acquire a small business loan from a bank, the bank must be large enough with enough investment to support your needs. Many entrepreneurs lack the wisdom and resources to secure loans from banks. Banks often have hidden charges and interest rates that fool new business owners, causing them to incur larger debts. A bank with business-friendly terms has transparent loan policies and does not add any hidden or manipulated charges or interest amounts. Consult with expert accountants before selecting your bank to have a clearer idea of banking policies if you are looking to secure a loan soon.
- Location: The proximity of the bank to your office is very important. If you frequently withdraw or deposit money directly in the bank, your bank account should be opened in a bank close to your office. This is also important if you frequently require bank-issued certified checks or frequent withdrawals of cash via check. It is also important that the bank you choose has wide-dispersed Automated Teller Machines (ATMs) to enable you to make frequent transactions while traveling without additional charges.
- Digital Services: With the involvement of digital services in almost every sector, business banking is no different. Before you select your bank, thoroughly evaluate the digital banking services offered by the prospective bank. Determine if you will be able to manage your payroll effectively through the banking application and whether the digital platforms offered by the bank meet your needs.
- Avoid Internet Banks: While digitalization has made things easier, it is always important to be cautious in online banking operations. One of the most common international scams is through online banks. While selecting a bank, be careful if you consider an internet bank, as it can be a scam. Your best option is to review customer testimonials and speak to banking clients before choosing an online bank.