Business Banking

Researching Banks

Although it’s not always a legal requirement, it’s a very good idea to have a business account that is separate from your personal account. This will keep all of your business income and expenses clearly defined and apart from your personal finances.

In choosing a banking account, be sure to shop around. Every bank has different terms on business accounts, including different fees. An account with lower fees may not offer all the services you need, while a high-fee, high-service account may be more than you need.

Here are some questions to ask a prospective bank:

• What are the different business accounts that you offer?
• What are the fees charged for these accounts?
• What are your interest bearing accounts?
• Will I be issued a credit and/or debit card for use with my account?
• Are their special lending programs, lines of credit or small loans, available to your business customers?
• How soon will I earn shorter hold times on my deposited checks?
• What documents will the bank require to open an account?
• What services can I access online?

Choosing Your Bank

Don’t underestimate the importance of a convenient location and good hours. Especially when you’re spending so much time finding clients, distributors or other means of income, your time is extremely valuable. Having a close, convenient bank that is open when you need it can actually save you money.

Choose a bank based not only on the services you need now, but the services you can anticipate needing in the near future. It’s best to make the relationship you have with your bank a long term relationship. Not only will it save you the time and energy associated with switching banks, it also develops a trust that can enable better borrowing.

Compile a list of the services you expect to use the most and compare the fees for those services at the banks on your list. If the fees are much higher at one bank, that can add up to a lot of extra expense for your company.

If you’re considering opening an interest-bearing checking account, be sure your business will be able to maintain the minimum balance associated with that account. Interest will quickly be eaten up by fees if the balance is not met.