Sunday, 24 June 2018

Information and commentary for the small business banking industry

Why it’s important to choose the right bank for your small business

Be clear about your needs

If you’re starting out in business for the first time, the first bank you’ll think of is the one where you’ve done the majority of your personal banking. You might have been with them for a long time, and for a number of reasons – they’ve been really supportive while you were buying a house, they’ve helped you out with a personal loan… or maybe they just give your kids a lollipop if your appointment is becoming a lengthy one.

And there’s nothing wrong with that – if they have a great approach to personal banking, they could well be the best choice as your business banking partner as well. But the way to confirm this is to have clearly defined what your business needs are, so you can determine if the bank can help manage them.

Your business needs – things to consider

If you haven’t already done so, it’s time to sit down and put some thought into what your business needs are, and what you want from a bank. You might want to consider the following:

  • Supportiveness and reliability – whatever your business is, it’s important to choose a bank that understands how small businesses work and are capable of providing the support and advice you need.
  • Potential growth – a bank should be encouraging the growth of your business. Are they as interested in your aspirations as you are?
  • Specialized services – can they assist you with business loans, investment advice and cash management tips?
  • Large or small? – you might find that you can develop a better relationship with a small community bank, but a larger, national one might offer more flexibility with loans or have better interest rates.

Compare and contrast

Once you’ve defined your business needs, it’s time to look at the banks that can meet them, then line them up against each other and compare them. Arrange to meet with their small business specialists, and make sure you’ve compiled a list of questions you’ll ask each one. Record the answers, and spend some time comparing them.

Which banks specialize in what you need? Did you feel that perhaps one particular bank stood out in the field of small banking, and seemed to understand your business? How many are offering comprehensive online and mobile services? Which ones showed the most interest in your business and asked the pertinent questions?

Once you’ve met with them and collated your responses, spend a bit of time researching what other customers think of them. Online reviews are a great way to find out how a bank stacks up against its competitors.

Maintain your banking relationships

Since you and your bank are working together to manage the most important aspect of your business – its money – try to get along with them as you would a valued customer. Maintain contact, especially if you’ve been assigned a small business specialist you’ve clicked with. Continue to develop a good working relationship with your bank, and they’ll be in a better position to support and advise you.

Take advantage of deals that are being offered, and if possible, attend industry events. Banks often issue invitations to business conferences and get-togethers, and these are great networking opportunities.

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