Whether you are setting up a business bank account for the first time as a new business, or switching to a new banking facility, there is a lot to consider when making your choice of business bank. Here we look at what you should think about when weighing up your options.
For your savings accounts, it is obviously desirable to have the best possible rates of interest so that you earn as much as possible. But don’t place all your focus on this element, because there are other factors that may provide you with benefits that turn out to be more significant. If you don’t hold too much of a balance in your savings accounts as a rule then don’t make this your main basis for choice.
Some banks offer a more preferential range of business credit cards and loan facilities. If products like these are important to your business, for example if there is a credit card on offer that has no fees, gives you a higher credit limit and a competitive balance transfer rate then that could be a deciding factor for you. Just be sure to prioritise your requirements, because these features could come at a cost in terms of reduced benefits in other areas.
Also consider that the products you need during the early days of your business are likely to be different to those required as your business becomes more established. At the outset for example, you may benefit from an overdraft facility whilst you find your feet with cashflow. You may even need a start-up loan. Later on, these features may not be so important and you may be more inclined to appreciate things like business development funding.
When it comes to bank charges, there is little you can do to avoid them on a business account. Some banks will offer free banking for the first one or two years, but you’ll need to weigh this up with the charges you’ll face once the free period is over.
When looking at bank charges, think about how you bank. If you mostly use online banking and electronic transfers, work out what sort of charges you’ll be looking at for those types of transaction. If however you make more use of counter services, perhaps because you get paid in cash or cheques rather than bank transfer, consider an account that doesn’t levy too high a charge for those. If you need to take card payments, look at the costs involved in processing those.
If you value a face to face service and personalised advice, and / or you are going to need to use counter services on a regular basis, make sure you choose a bank with a good choice of local branches for easy access. Bear in mind that some banks are more geared towards online services, and that others are closing branches in certain areas of the country on a fairly regular basis.
Some branches offer specialist services, such as access to small business advisers. These can be very valuable, especially to the fledgling business. Check out what is on offer in this respect during your research.
Other factors to consider when choosing a business bank are payment processing times for your inbound and outbound payments; international banking facilities – vital if you do business with overseas clients; access to discounts and offers, and ease of switching account should you wish to move to another bank.
If you are uncertain as to what should matter most to you when choosing a business bank, why not ask your local bookkeepers for advice?