From day one, every founder should be on the hunt for a supportive and dependable banking institution. Every small business is unique, and requires different business banking services.
Whether you’re running a promising startup or well-established small business, finding a bespoke banking service that’s tailored to your company’s needs is absolutely crucial.
Here’s a few quick and easy tips to help you arrive at the perfect choice.
1. Create a wish list .
Before you allow yourself to be courted, take a moment to decide what banking facilities your business actually needs. For example, if your company hasn’t already got access to a financial advisor to help with cash flow and investment decisions, you should be on the lookout for accounts that come hand-in-hand with these special services.
It’s also crucial to assess whether your business will require a business loan, and whether your ideal business bank will offer such loans. Don’t just think about your short-term needs – use some foresight and draw upon your business plan in order to consider how long-term expansion might impact your requirement of a borrowing facility.
2. Compare business banking institutions.
Once you’ve got the wish list for your perfect business bank, it’s time to see what the market has to offer. Hit the web, and search for banks that specialize in what you need. Comparison sites and reviews can be useful; however, don’t place too much faith in the experiences of others (as many business banking reviews are paid reviews.
Call potential matches and request information relating to fee structures and interest rates, and then compare that information against competing business account options. Then, before agreeing to meet with an account manager, formulate a list of questions to ask. It sounds tedious, but you won’t regret it.
3. Bigger banks aren’t always better.
When you are first starting out, it’s awfully tempting to align your company with a high street bank because it is internationally recognized with a consolidated brand name. But the truth is, bigger isn’t always better.
Since the credit crunch, a vast majority of large institutions have become far more stringent about how much they’re willing to lend small businesses; therefore, if you plan on taking advantage of business loan services, you may find yourself unable to secure full funding through a typical mainstream bank.
On the other hand, research shows that smaller banks account for around 54 percent of all small business loans. They also might be able to offer a more personable approach to your venture that you may find beneficial. Visit prospective banks in order to get a feel for how the bank works and the type of support individual members of staff may be able to offer you and your clients.
4. Don’t get complacent .
After you think you’ve finally found the right account for your company, go for it. But it’s important not to get overly attached. Keep a weather eye out for potential changes in policy, new add-on facilities or changing rates that could impact your bottom line.
It’s worth sitting down every few months in order to conduct a quick review of the market. In the end, making sure your company has the most competitive business banking services available will open up a world of opportunity for expansion. It will also be a load off your mind.
This article has been edited and condensed.
Rachel Craig is a Digital Media Executive at Quality Formations, the UK’s leading company formation services provider. She specialises in private limited company formation, statutory compliance and corporate taxation. Connect with @Q_Formations on Twitter.
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