13 Questions Small Businesses Should Ask When Choosing a Financial Institution

While building your business, you have likely planned to open a bank account dedicated to all your business’ financial activity. What you may not have considered are all the ways your financial institution can help make your life a little easier as a business owner. In this blog, let’s explore the services you should consider when choosing your banking partner for your business:

Account details

Before you decide on what account you’ll be using for your business, it’s important to consider the benefits that may or may not be included. Here are a few questions to ask yourself before settling on a business account:

• Is your account offering a competitive interest rate? Every dollar counts when you’re starting a new business, and earning interest on your deposits is one of the easiest ways to generate income without having to think about it.
• Are there any hidden fees? A small fee may not seem like much initially, but when they start to add up, the total amount may surprise you. Make sure to inquire about any fees that your account may include.
• Is overdraft protection available? While no one wants to be in a scenario where their payables exceed what’s in their bank account, sometimes things don’t always go as planned. Overdraft protection can help lighten the burden and ensure your payments are not jeopardized.

Basic account services

When shopping around for a basic account, here are a few questions to ask about the account’s usability, customer service, and convenience.

• How user-friendly is the online banking system? In our digital world, it’s more important than ever to have instant access to your accounts in a reliable and easy manner.
• Can you reach a bank representative outside of normal business hours? You may find yourself needing to speak with someone after 5:00 PM or on a weekend. Make sure your banking partner will be available for you whenever you need them.
• Do you have the ability to deposit checks at your convenience? As a business owner you will more than likely spend most of your time doing your actual job, but you’ll still need to find time to handle the administrative duties, such as banking. Mobile or remote deposit can help save time by eliminating the need to visit a physical branch location.
• Is the limit on your debit card sufficient for business-size purchases? Understandably, businesses tend to spend more money than individuals. Inquire with your banking partner about what your spending limits are, and if they’re flexible.

Enhanced account services

Going beyond the basic account structure, it’s helpful to know what a bank’s enhanced account services include. Here are a few services you may need for your business, depending on your specific needs:

• How are you planning to pay your bills, and how are you going to get paid for your product or service? Talk to your financial institution about ACH Origination, BillPay, Merchant Services card processing, Zelle, and other options that may be available.
• How are you going to pay your employees? The strict requirements of payroll can be a lot to manage. If taxes and other withholdings are not handled properly, it can have a major impact on your business and your employees. Ask about what payroll solutions your bank can offer you.
• What happens if you experience fraud? Is there any sort of protection or prevention available for your business?
• When your business becomes successful, how can you make sure your funds are protected? The NCUA (for credit unions) and FDIC (for banks) insure up to $250,000, but there are options for extended insurance that you should keep in mind.

Financing options

Finally, take a look at your financing options. Whether it’s for getting your business off the ground or finding resources to grow your business, there are options out there for you.

• Will your bank extend credit to you? If you’re a new business, it can sometimes be challenging to get a loan. Inquire about options for someone who is building a new business.
• Are you aware of resources for new businesses? Check out the SBA, SBDC, and VEDA to see how they could work with your financial institution.

Starting a business, not to mention running a business, can be a stressful and oftentimes overwhelming endeavor. Thankfully, there are avenues to success and picking the right financial institution who can meet your needs is a step in the right direction.