How to choose a bank for your small business

Choosing a bank for your small business can be more complicated than opening a personal account, which may not be surprising since business bank accounts come with more features, services and support that are designed to help you work efficiently. It’s important to do your research and make sure that the bank you choose to do business with is one that meets your needs.

Whether you’re getting your business off the ground or reevaluating your current banking relationship, here are some important factors to consider when selecting a bank.

Why is it important to choose the right bank for your business?

In a lot of ways, running a business comes down to relationships. And one of the most important relationships you have as a business owner is with your bank. The right banking partner can help you:

Manage your finances

Many new business owners use personal finances to get their business up and running, but mixing business and personal accounts can cause complications down the line. Opening a business bank account is the first step to streamlining your finances and positioning your business to borrow. In addition, separating business and personal finances can help protect your personal assets should your business ever face a legal claim.

Build credit

Building business credit is a journey. Most new businesses don’t start off with any credit, which can pose a challenge if you need to borrow money in order to grow. The right bank can help you choose strategic products to not only build your business, but build your business’s credit, too — so your business can qualify for more favorable borrowing in the future.

Scale sustainably

In addition to helping you secure credit or loans, the right banker will seek to connect you with additional resources, opportunities and information to support your long-term growth. For example, some banks offer tailored services to support new business owners or are approved to administer Small Business Administration loans.

What to consider before choosing a bank for your business

Location, location, location

Why it matters: Cash may be king, but convenience is a close second. Your bank’s physical location can have a big impact on your day-to-day operations.

Consider your priorities around commuting to your closest branch, accessing nationwide ATMs and operating overseas. For example, if most of your customers pay with cash, then a bank in your neighborhood where you can make daily deposits easily versus one across town could help you streamline operations. If you travel frequently, then a bank with a strong national or international presence may make the most sense.

Variety of accounts offered

Why it matters: Payment acceptance. Business checking. Operating capital. Using a single bank for all of your business banking needs can help you streamline and centralize all of your finances.

Most banks offer business checking and business savings accounts. These accounts typically come with a business debit card, checkbook and mobile banking services. For many businesses, that’s enough. But if your business has specialized needs, you might require access to different types of accounts. For example, if you accept debit and credit card payments, you’ll need a merchant account. Or if you pay or receive funds in international currencies, a foreign currency account is ideal.

Features and benefits

Why it matters: No two banks are the same — and sometimes, the differences are substantial. Exploring what kinds of products and features are out there can help you find a bank that meets your needs.

Business banking features go beyond what’s available for personal accounts. Yes, your bank is a place to manage your operating cash. But did you know that many banks also offer accounting tools, payroll services and integrated third-party apps? Larger banks may even offer substantial benefits like a 401(k) plan for you and your employees.

When choosing a bank for your business, think about features that could serve you immediately, like automated ACH payments and mobile banking, as well as products that could help you reach your long-term goals. That way, you can focus your research on the banks that offer the most relevant services for you.

Potential for growth

Why it matters: Accounting for your business’s long-term borrowing needs can help position you for future success.

Just as you wouldn’t buy snug shoes for a toddler, you don’t want to lock yourself into a banking relationship that doesn’t leave enough room for growth. Before scouring the offerings at various banks, first determine your own short- and long-term borrowing needs. Then, compare how financing options from prospective banks match up with your goals and timeline. Be sure to read the fine print — each bank’s credit and loan terms could stunt your growth or help fuel your success.

Requirements and fees

Why it matters: To minimize your expenses, make sure that the features and benefits you’re paying for align with your needs — and that you won’t be penalized for how you run your day-to-day operations.

Most banks charge a monthly fee to maintain your business account. Typically, the more features you have access to, the higher the fee. In addition to maintenance, other common fees include ATM fees, overage fees and withdrawal and deposit fees. Consider how you plan to use your business banking features and whether they’re worth the cost.

In addition to fees, many banks have requirements for your minimum opening deposit, monthly transactions and total cash allowance. These requirements may not affect every business, but for those with frequent transactions or in cash-heavy industries like dining or retail, it’s wise to ask about parameters. If reaching your sales goals translates to penalty fees with your bank, it’s probably not the right fit for your business.

Industry experience

Why it matters: A banker who understands your industry can help anticipate your needs and offer insights into what has worked for similar businesses.

Depending on your business, it might be important that your bank has experience in your industry. For example, running a seasonal business comes with a wholly different set of financial needs from those operating year-round. Other niche industries like nonprofits, healthcare or commercial real estate can also benefit from a banker who understands their specific needs and can help match them with the right financial products.

Services and credibility

Why it matters: Managing finances can be stressful. Using a trusted bank with convenient customer service can make a huge difference in your experience — and protect you from wasting precious time stuck on hold.

The way that a bank interacts with its customers speaks volumes. When choosing a bank for your small business, notice what kinds of services each bank offers its customers. For instance, do they have 24/7 hotlines? Specialist support? One-on-one coaching?

In addition, read reviews to find out what real customers say about their interactions with bank representatives. This can give you a sense of how each bank approaches problem solving and how customer-friendly they make their processes.

Find out more about Chase Business Banking

If you still have questions about opening a business bank account, reach out to a business banker. They’re ready to share information about banking features and guide your next steps. Locate your nearest Chase branch to get started.

FAQs about choosing the right business bank

Should I have more than one business bank account?

It depends. A basic business checking account is a good place to start, but you might find that you have more specialized needs as you grow. Find out what kinds of business bank accounts are available at each bank you’re considering.

What are the basic features to look for when choosing a bank for my business?

At a minimum, your bank should offer a business checking account, business savings account, debit card, credit card and online banking features. Most banks will also offer a business line of credit and business loans. Ask upfront about additional features that you may need.

Are online-only banks suitable for new small businesses?

Be cautious when dealing with online-only banks. Do your research to make sure they’re legitimate, FDIC-insured and well-reviewed by customers. A vetted online bank can help you meet very simple banking needs, but keep in mind that you won’t receive personalized support or have as much room to grow.

What are the bank features that benefit your business?

Banking features vary widely. It can help to work backwards — determine your own priorities when it comes to features like accounting, payroll and customer service, and then find a bank that aligns with your needs.

How do you open a business checking account?

Opening a business checking account is straightforward. First, you’ll need to provide the bank with basic information about your business, such as your business address, annual sales and number of employees. Then, you’ll need to submit documents to verify your personal identity, tax identification number and other details about your business. Learn more about how to open a business checking account.