How to Choose a Bank for Your Small Business

If your company has any success, you're going to need to have a place to stash your profits. While 'under the mattress' and fancy piggy banks could work, they're not going to offer you online bill pay or automatic quarterly tax payments. It's time to graduate to a real, honest-to-goodness bank. But the question remains: which one?

Difficulty: Moderate

Instructions

Things You'll Need:

• A computer with internet connection or time to visit different bank branches.
• A spreadsheet program like Microsoft Excel or lots of notepaper

1. First, figure out which banks are conventiently located to your base of operations, whether that be your home or an office. If you need to go to the branch, you're not going to want to waste a half hour driving there. With online banking and, now, scanning and depositing checks right from your desk, visiting the branch is becoming practically obsolete, but it's not there yet.

2. 
    
   Make sure you get all the features you want..

   Once you've narrowed down your list to a handful of banks in your area, open up a new spreadsheet document and add a column of bank names. Across the top, label the columns with features important to you, such as:
   -Is there a minimum monthly balance requirement?
   -If so, what are the penalty fees?
   -Do they offer free business check cards? Free checks?
   -Is there free online banking?
   -How many free transactions are allowed monthly and what is the penalty for transactions after you've reached your limit?
   -What are their rates on lines of credit (you may need to advance yourself small loans to pay employees or contractors while you wait for invoices to be paid)?
   -Can you scan and deposit checks right from your desk?
   -Do they provide payroll services?
   -Will they arrange automatic quarterly tax payments?
   -Anything else that may be important to you.

3. Begin to insert the answers for each of the column heads for each bank. You may be able to eliminate a few immediately. For instance, if four of the five banks you selected require no minimum monthly balance, but one requires a $3000 minimum, you can probably knock it off your list unless you forsee that not being a problem and that bank has other features worth keeping it on the list.

4. Evaluate. Compare each bank to the next and find out which one has the most, if not all, of the features you're looking for. If you've got a close call between two or three, pay a visit to the bank and check it out if you're not familiar. Is it hospitable? Clean? Do the customer service representatives treat you well?

5. Make the final decision and visit the bank to set up your accounts. Have an idea exactly which products you're going to want before you sit down there, or they may try to talk you into things you don't necessarily need.

6. 
    
   Try to get a supplier to take you seriously when you hand them this...

   Sign up! Oh..but stay away from the Hello Kitty checks. This is a business after all...

Tips & Warnings

• Take your time. Unless the money is flowing in with nowhere to put it, you have some time to make a decision. There's no reason to rush it.
• Check the internet for customer reviews. See if there are any complaints out there about the bank. Remember, one or two complaints could be isolated incidents. More than that is a pattern.

[lighthouse1958]

on 1/29/2010 I love your picture. I wish it was so easy. I would love to start up my own business. My husband and I would devote our time totally to a business and we would be very good at it. Great tips. thanks. 5*

[femwriter]

on 1/4/2010 What a helpful article on how to Choose a Bank for Your Small Business, thanks for sharing. It truly deserves a 5* rating and recommendation!

[dixie306]

on 1/1/2010 Very well written! Great info! 5* and recommended author!

[smoot27ryan]

on 12/31/2009 nice article

[jenecequa]

on 12/3/2009 Cute check! The Hello Kitty one, I mean. I agree with Lighthouse - I'll hand this one to my son - who has some interesting checks of his own!