Finding the right business bank account can be time consuming. Small business owners have a lot on their plates. As well as managing staff, directing company policy and overseeing the brand development, they’re also responsible for the cash flow and financial running of their company.
A business bank account is naturally preferable in these circumstances. They’re well set up for small businesses who’re looking for support from either established or lesser-known financial institutions.
With such a wide variety of business bank accounts on the market, you may be struggling to find the best one for your business. This article aims to clear up some of the jargon, to cut to the chase, revealing what to look out for when you select your company’s business bank account.
Why You Should Shop Around
Business bank accounts come in all shapes and sizes. They cater to all kinds of business, with many different bonuses and services that can either be redundant or incredibly useful for your own company.
It’s in this sense that you should take an overview of your options before launching into the creation of a business bank account. By selecting wisely, you’ll be securing yourself the best-possible financial support on the market, tailored to the needs of your company.
There are some fundamentals that most business bank accounts will offer, which we can take as given.
You should still check with each provider to decide to what extent they offer these fundamentals. Of course, they’ll bank your money and record your financial activity. Many banks will provide business support through tips, meetings, and all-important interest only business loans.
These should be seen as a minimum from which you can build additional services into your banking arrangements.
A quick word on sole traders or self-employed individuals before we head into the larger enterprises that constitute small businesses.
On the whole, if you’re a sole trader, you should remain to use your personal bank account. You’re likely offered better terms in this account, and you’ll not require the services that business accounts provide, such as commercial loans.
All you’ll need to do is check the terms and conditions of your bank account, or check in person at your bank in order to get the green light that you don’t need be using a business account. Any larger businesses will have to look to business bank accounts, though.
The Cheapest Business Bank Accounts
One of the perks of certain business bank accounts is that they’re competing to charge you the least for their services.
Some will offer deals, like your first-year free-of-charge. Others will give you attractive interest rates to balance out their charges or will offer you a pay-by-volume usage arrangement that is incredibly fair and well-priced.
The downside to these accounts is that they don’t quite offer the flexibility of services and software plug-ins that more expensive accounts do. As such, only go for the low chargers if you’re not looking for swathes of additional business services.
Another different perk to business bank accounts is the interest rates that they offer on the cash that you store in their institution. This is less important for those businesses who expect never to have a sizable chunk of money in their kitties.
For many small businesses, this is the case. You’ll be too busy repaying interest on commercial loans and reinvesting your profits. You’ll not have the liberty of adding value to your cash through interest rates.
If for whatever reason, you do happen to have the luxury of cash reserves that you’re unable or unwilling to invest, then you should look for the most attractive business bank accounts that reward you with excellent interest rates.
In many cases, you will be able to siphon cash into a business savings account, with the higher interest perks that this entails, as well as operating from your usual day-to-day account.
Loans and Business Support
Many banks are proud to support small businesses in their growth towards higher profits and better renown. They do this in a number of ways and, even in the ways in which they overlap, you’ll find that generally some banks are considered more supportive, helpful and professional than others.
One of the significant sources of business support you’ll be able to enjoy with the right bank is, of course, the provision of business loans. The bank that you choose should be one that offers these with competitive interest rates and good flexibility on the amount and the payback rate of each investment you require.“Go online to a local community bank that is well rated, regarded in the community and is proactive toward small business and trade business.” – Jeremy Schaedler, president of Jeremy Schaedler Insurance
Make notes from your research to see which account will suit you best in terms of loan provision, and go from there.
Regarding other forms of support, you’ll have everything from cash flow management and industrial equipment financing. Services like accounting through payments software integration are incredibly helpful.
Most additional services make the management of your financial health straightforward and effortless. Just remember that all these services will cost you extra, so don’t sign up to them unless you’ve decided it’s of significant benefit to your organization.
Neo-Banks and Challengers
With trumpeting swagger, the financial technology revolution has provided the banking network with a heady vanguard of ultra-modern, new-age banks. In many cases, they’re set up to work with small businesses.
They’re deserving of more than a mention in this article given their incredible work to combine APIs on The Cloud to bring business customers some of the most modern and sleek services in the whole of the financial world.
You may feel that you’re taking a risk when you go with a new bank. After all, they’re unproven in an ecosystem dominated by titans of the industry. However, if the financial conduct authority approves them and they are registered as a bank, your cash will be protected, which significantly reduces the risk you’re taking.
Read up on the Fintech revolution to attain a broader understanding of the multiple benefits that new banks using new forms of software can have for your company.
Read reviews from other businesses and read up on case studies to consider whether you shouldn’t join the race to modernize your financial machinations.
The above tips should help guide your decision-making when it comes to selecting the best-possible business bank account for your small business. By doing so, you’ll be creating the soundest financial base from which to build the success of your organization.