A quality small business bank can help you keep your finances in order and give you access to useful financial products like loans and credit options. But there are a ton of different banks out there, from nationwide chains to community credit unions to online-only banks.
How to Choose a Bank
So how can you determine which options are best for your business? Small Business Trends spoke with a couple of small business banking experts to get some essential tips.
Examine Your Banking Habits
Priyanka Prakash, business finance expert for Fundera  said in an email to Small Business Trends, “The best way to know what you need from your bank is to look at the last 6-12 months of your financial history (if you have an established business). If you have a brand new business, look at 6-12 months of financial projections. This review will help you answer many different questions, such as how much surplus cash you expect to have on hand each month, how much you spend on a monthly basis, your volume of credit card transactions (if applicable), and whether you need additional capital in the form of a loan or line of credit. This information will help you narrow down what you need from a bank and help you ask the right questions as you research banks.”
Decide Between Online and Branch Banking
Today, there are several online banks that offer features that may be useful to small business owners. With these accounts, you can enjoy the convenience of electronic transfers, online bill pay, and even mobile check deposit.
However, if you deal with a lot of cash rather than digital funds, a bank with a physical branch nearby is probably a better option. Prakash also recommends going with a branch bank if you may need to take out a loan, since that face-to-face relationship can improve your chances of approval.
Decide What Features You Need
Different types of banks also offer varying features. For example, you might get more personalized service at a small, local bank or credit union. But you might enjoy more features of convenience with nationwide chains.
Prakash says, “Large, nationwide banks tend to offer a wider range of products, more perks, and lower fees, and you get the convenience of a big branch and ATM network. However, big banks also offer less personalized attention for small businesses. Smaller community banks tend to have a closer connection to local businesses. That makes smaller banks more flexible when underwriting a loan application, and they’ll be more likely to waive an overdraft fee or monthly fee if there are extenuating circumstances.”
Arielle O’Shea, banking expert for NerdWallet  added in an email to Small Business Trends, “Don’t overlook credit unions, which often have low or no monthly fees and higher limits on cash deposits for business checking accounts.”
Nearly every bank charges fees of some kind. The key is finding fees that aren’t especially pertinent to your banking needs or that you can easily cover.
O’Shea explains, “They often set limits on the amount of cash you can deposit for free each statement period, charging fees on deposits that go over. Those fees, which are often around 30 cents per $100 over the deposit limit, can add up quickly.”
She adds, “They may limit the number of transactions you can conduct within the account, charging a fee for each additional transaction. You might pay as much as 40 cents per transaction once you’ve passed the limit.”
Look at Earning Potential
On the other end of the spectrum, you may be able to earn some extra money if you choose a bank with decent interest rates for accounts. This is especially pertinent for those who keep or deposit large amounts of money.
O’Shea explains, “You might also be able to find a bank that pays interest on your cash deposits — you may as well earn that free money, as long as it isn’t offset by high fees.”
Do a Branch Visit
Prakash says, “If you’re considering a physical bank, then I definitely recommend that the small business owner visit the bank in person. You can discuss the type of business you have, what products/services you need now and in the future, and have a realistic discussion about your average bank balances and credit history. Visiting the bank is also just a good way to tell if it’s subjectively the right fit. You’ll be working a lot with your bank as your business needs grow and fluctuate, so you should have a good rapport with bank staff.”
Talk to Other Business Owners
Prakash explains, “Sometimes, all it takes is a conversation with a fellow business owner to find the right bank for you. Try to find a business owner you trust in the same industry and operating a business of roughly the same size in the same location. If they love their bank, it’s worth learning more about.”
Look at Customer Service Rankings
If you don’t know of any small business owners that you can ask personally, you can find out more about what customers think about their banking experiences by doing some online resources.
Prakash says, “Online ranking sites, like J.D. Power and Associates, rate banks in different regions on small business owner satisfaction. This is a good starting point for small business owners who don’t know where to start. Fundera also has a ranking  on the best small business banks in different categories.”
Consider Multiple Banks
There’s no rule that says you have to choose and stick with one bank for all of your financial needs. Some small business owners may find it beneficial to mix and match.
Prakash explains, “It’s also possible that you might end up choosing different banks for different purposes. For instance, one bank might offer ideal checking and savings accounts, but another bank might offer better business loan options. It can work in a small business owner’s favor to have multiple banking relationships.”
Don’t Be Afraid to Make a Change
You can also switch banks over time as your business grows and your needs change.
Prakash says, “If your banking needs change or if you feel like your current bank isn’t up to par, you can always switch to a different bank at any stage of business. Don’t feel locked in. Small business owners are coveted customers for banks because they tend to have higher deposits than consumers. For that reason, you’re in the driver’s seat when choosing a bank and shouldn’t settle.”