NFIB

Online Banking Now Geared Toward Small Business
06/ 12/ 2003

by Tamara E. Holmes

According to Boston-based research and consulting firm Celent Communications, 21 percent of small businesses will be conducting banking transactions online by 2005, up from 12 percent this year. For business owners who travel frequently, online banking services are particularly helpful since they can be accessed 24 hours a day from any computer with Internet access.

While some banks have been allowing people to check account balances and transfer money from one account to another for years, banks are now unveiling new services and capabilities that are geared specifically toward small business owners.

Take San Francisco-based Wells Fargo. The financial institution has an entire area of its Web site devoted to small businesses and the types of transactions they are likely to make. The company's Business Online Banking services include not only the ability to pay business bills, but also the ability to pay federal taxes, simply by transferring funds. Possibly even more valuable to some small business owners, Wells Fargo allows users to access both personal and business accounts and transfer funds between the two. If you're a sole proprietor, this arrangement could make your financial life much easier.

But that's not all the bank offers. You can use the bank's online payroll solution to offer employees direct deposit, print checks and even track vacation and benefit accruals of your employees.

If you are looking to start selling your merchandise online, the bank offers its eStore service. The service gives you the choice of building a site hosted by the bank's servers from scratch or transporting the electronic shopping cart technology used to make Internet sales to your company's own Web site.

Another bank, Boston-based Fleet, also offers a number of services to small business owners. One helpful feature is the ability to set up customized alerts, which will notify you if account balances exceed or drop below a designated amount. You can also have alerts sent to you if certain bills remain outstanding for a designated period of time.

The institution's online banking features also make it easy for you to plan your finances. Balance-forecasting features and the ability to schedule transfers or payments for the future help you manage your day-to-day cash flow. If you want to review your business's recent financial transactions, you can access information from the previous 18 months as well.

In addition to offering regular banking capabilities, a number of banks allow small business owners to apply for business loans, business credit cards and lines of credit online. In many cases, users can simply submit information via a Web-based application and receive a ‘yes' or a ‘no' instantly. For those who prefer to fill out an application on paper, banks often allow users to download and print out applications, which can then be mailed or hand-delivered to the bank.

If you're worried about the security aspects of online banking, your fears are probably unfounded. Banks use extremely sophisticated encryption technology and tools such as firewalls to keep digital intruders from accessing private information.

Most banks offer online services for a monthly fee, generally between $4 and $10. They also may require you to install a particular type of software on your computer, which may be a program that's proprietary to the bank or one that is in the general marketplace such as Intuit's Quicken or Microsoft's Money.

Online banking services aren't for everybody. Some people undoubtedly will feel more of a sense of control by writing their own checks and paying personal visits to their local banks. But even if you're not convinced that online banking is for you, it won't hurt to see what your financial institution is offering. Now that banks are paying close attention to small business needs, you might find yourself pleasantly surprised.

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