What to look for in a small business checking account

AsiaVision/Getty Images

AsiaVision/Getty Images

Where you choose to bank has a bigger impact on your small business than you might think. Access to expert advice, small business products and credit opportunities can support your business growth. If you’re stuck with a financial institution that doesn’t have your needs in mind, you may be missing out.

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Small business owners and entrepreneurs are a unique group of customers who have one thing in common – they are leaders. And they deserve a small business banking relationship that gives them the tools and support to be successful. But what makes a great checking account for a small business? Successful entrepreneurs share what they’ve been looking for—and what you should too—when buying a new business checking account.

1. A bank that supports your dreams

Many institutions will claim that “the customer comes first”, but how often is that really the case? Unfortunately, many well-known banks care more about investors’ returns than about the foundation that drives their business: their customers.

Stay away from such institutions and instead focus on finding a bank that is committed to understanding and meeting the needs of their customers. Danielle Kane, CMO of Grasshopper Bank, suggests that customers are looking for banks that prioritize the customer experience while delivering quality products.

“Look for a bank that offers a more empathetic and inclusive approach to doing business; One that is heavily focused on the needs of the customer is a good goal. In addition to expected features like low fees and efficient tools, look for partners that offer a personalized experience,” said Kane.

Along with suitability, it’s equally important to ensure a match between customer experience and financial acumen. Do your research to ensure the institution offers small businesses the security expected in finance. This step is especially important as new fintech companies are actively marketing to small businesses.

“Make sure the bank of your choice has FDIC insurance, which protects against bank failure and theft,” Kane said. “Your bank should also be chartered and US-based — especially if you’re going the digital route.”

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2. A bank that specializes in lending to small businesses

While you may have started your business with funds from friends and family, there will likely come a day when you will need a loan. And when you do this, you want to make sure you have a banking partner who is willing to support you.

Business credit needs are universal, and access to a line of credit allows you to leverage your cash reserves. That’s why Truework CEO Ryan Sandler urges entrepreneurs to think about their current and future financing needs before making a bank decision. “When opening a small business account, it’s important to consider the lines of credit you plan to use,” Sandler said.

Banks often grant low interest rates to customers with multiple business relationships. If you have a personal account, credit cards, and loans with an institution, you may be given preferential access to their business products. Banks that offer this multi-layered service can help you save twice over. Many institutions offer similar product offerings to the employees of your small business, which can be a great benefit for employees.

“Just like a personal bank account, banks that prioritize customers while having the right fit, rates, and features for your business are a must. You should also think about what kind of digital customer experience you are looking for that can make life easier,” Sandler said.

3. Ease of doing business

One thing is for sure: small business owners have a lot to do. Opening your checking account with a bank that you can easily work with makes a world of difference. Think about your normal day and how much time you currently spend banking.

As your minutes turn into hours, there’s a good chance you’ll find some efficiency gains. Think about your physical location and how important a personal bank is to your business. If it’s important, consider store locations, hours of operation, and deposit options for the car or drop-off.

In general, digital access is crucial in modern times as it can simplify day-to-day transactions and management. Digital banks have gained traction, especially since the pandemic began, when some business and retail customers shyed away from personal banking. These can offer convenience, reduced fees, and dynamic offerings not found at traditional institutions.

Make a list of the ways you need to work with your bank to aid in your research and decision making. If you conduct transactions online, check their security procedures. See how they protect your data and the data your customers provide in their transactions. If you’re considering a newer institution, make sure it’s covered by the same FDIC protections that other banks offer. Do your due diligence today to avoid problems later.

How to set up your new business accounts

Changing banks creates a certain level of complexity that requires your focused attention. Once you’ve determined where you want to open your small business checking account, determine which accounts you need to migrate.

Work with your bank to transfer obligations to your new account and use their expertise to ensure a seamless transition. Don’t close old accounts until you’ve confirmed everything is up and running.

Now that you have a partner in small business banking, you can focus on your business. And when you need financial expertise or service, you can count on your bank to have your back.

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This article originally appeared on GOBankingRates.com: What to look for in a small business checking account

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