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3 Things Your Bank Shouldn't Be Without

Small Business BankingDon't let the deluge of banking products and services confuse you: There are three major characteristics that you should look for in a bank if you own a small business. The rest is icing on the cake.

1. Online services

No matter how small your business is, you don't have to run to the bank to deposit checks or conduct daily banking business. Today almost all your banking can be done from a computer -- or even a cell phone. 

Most all national banks have this option -- with a variety of bells and whistles -- for its business customers; many regional banks and small local banks are coming online -- although some still have limited options.

Make sure you check out what a bank means by "online services" to see if it matches up to your specific needs.

You will probably want the following features: 

  • No or low online fees. Each bank collects different fees for online banking or may have an account balance criteria. Ask and read the fine print.
  • User-friendly web tools. You will want to look for banks with web sites that easy to navigate, budgeting tools, and recent transaction reports (payments, transfers and deposits.)
  • Excellent security. You want a site that is secure from threats (such as emails from phishers), and warns you when there has been a breach in security. You also want a bank that will notify you when there's been overseas (or excessive) activity on your business card, or if someone tried to access your account with a wrong password.
  • Cash management. Make sure the bank offers the convenience of online management of invoices, collections and/or payroll.

2. Industry expertise

While it may be tempting to jump at the first bank that has good interest rates or no online or checking fees, your bank needs to be more than a good place to park your money. As a business owner you will most likely need capital at some point to expand your business. For this, you will need a bank that understands your industry and its particular cash-flow challenges, growth cycles and other issues.

While small banks better understand the local community, large banks often have the resources to bring in industry-specific advisors to help clients. 

For a banking relationship to be successful, the banker should know the industry inside and out. If this is not the case you will set yourself up for disappointment and frustration since you will spend most of your time educating the lender.

Ask your banker:

  • If the bank has clients in your specific line of business (for example, gift store retail, car parts manufacturing, newspaper publishing, etc.)
  • If not, ask if the bank has experience helping clients in your industry (retail, manufacturing, publishing, etc.)
  • If so, ask for references and call them.

3. Chemistry

While you may have all the right elements lined up, you do need to ask the final question: Do I like and trust my banker? 

You need to find a bank you feel comfortable going to, and a banker (or bankers) who listen to you, who you trust, who understand the needs of a growing business and will provide unbiased advice.

Chose several promising banks that fit the first two criteria (online banking and industry expertise) and start on your search by setting up a meeting with a lending officer. Explain where you are with your business, your future needs and plans, and ask if they think that the bank is a good fit for your business. Trust your instincts about how comfortable you feel during this conversation and if the banker has your best interests in mind.

This kind of relationship-building will not only give you a trusted advisor to add to your business team, but will also go a long way to helping you in the future when you will need capital to grow your business.