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Business Banking

A checklist for choosing a bank

August 10, 2008


Q: I'm in the market for a new bank. There are many that say they cater to small businesses, but how do I pick the right one?

A: In today's tech-savvy world, you need a bank that enables you to do business online.

The last thing a busy small-business owner needs is to have to run back and forth to the bank to make a deposit or transfer money between accounts.

Online capabilities to look for include electronic funds transfer, invoicing, bill-paying, payroll, etc.

Also, look for a variety of value-added money management services.

You might want to set up a retirement account for your employees or open a merchant account so that you can accept credit cards.

Find a bank that will deal with smaller accounts and lower volumes and not penalize you with higher fees. Many banks offer free checking for small businesses, but make sure you understand the fine print, such as whether you need to maintain a particular balance in your checking account for the fee to be waived.

Look for a bank that is upfront about fees and might be willing to negotiate or create a package deal just for you. It's a good idea to ask friends and business associates which bank they use and whether they're happy with the service and the fee structure. But the real key to finding the right bank for your business involves more than transactions and fees. The right bank will help you expand your business.

Even if you don't have immediate plans to take out a loan, find a bank that can help with your financing needs when the time comes. Look for a bank that participates in the U.S. Small Business Administration's guaranteed loan program. Also, find out if there is someone in the bank who understands your industry.

Bankers don't lend money when they can't understand why you need it or what you will use it for.

Develop a good relationship with your banker from the beginning.

When you find a bank that you think is a good fit, set up an appointment to meet with the branch manager and/or the loan officer just to talk about your business and start the ball rolling. A good banker will give you advice and counsel and recommend products and services that will work for your business.

When you need a loan, your banker will know you and will want to help your business succeed.

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