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Banking Tips From Small-Business Owners

Sept. 13, 2012
Banking, Small Business
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NerdWallet asked small-business owners to share their stories of banking:  Have they switched banks?  What is frustrating about small-business banking?  What is their advice for other small-business owners?

Here’s what they had to say:

1. Doing your business banking where you do your personal banking is convenient, but fees are sometimes lower at other financial institutions.

Mike Wolfe, president of WAM Enterprises

When I first started my business, I was banking with Bank of America. I didn’t do any research and already had a personal account with them. Weighing convenience versus fees, etc.,  I eventually decided it was best if we switched to a local bank.

[MORE: Best Business Loans]

Our current local bank offers small-business checking with no fees. No requirements for my debit card … and when I call, a person answers rather than making me go through an automated voice system.  I’m happy with our choice to stick to a local bank rather than a national chain.

Ann Marie Landry, owner of As the Music Plays

I appreciate the ability to view my company account in the same online account as my personal checking. It keeps everything separate, of course, but being able to have one banking log-in makes life that much easier.

Abi Cowell, owner of Promote Community

For simplicity’s sake, I opened a small-business checking account at Chase, the same bank I use for personal checking. This allows me to transfer funds easily and quickly. In addition, Chase’s mobile iPhone app, with the ability to deposit a check whether I’m at my desk, in my car or at the airport, comes in very handy.

Jon Payne, president of Ephricon Web Marketing

One feature I like is linking my accounts together online so I can transfer funds easily and schedule transfers. …  I can’t see not having it. As a small business, time is money — and having to call into a phone system or (gasp) actually stop by the bank to transfer between accounts would be crushing.

2. Credit unions and community banks often have better customer service and lower fees.

Sterling Morris, co-founder of PoliticIt banks with America First Credit Union. We’ve found that customer service with a credit union is excellent, and checking account fees, if any, are reasonable and flexible to support a small business’ needs. Even when we’re on the road in our 34-foot bus, meeting with politicians in different states, we have access to ATMs through the credit union’s network.

Jeff Kear, owner of Planning Pod

We went from a large national bank that had millions of individual and business accounts to a regional bank that focused more on business accounts. We moved for two primary reasons:

1. We didn’t have a dedicated point of contact at the large national bank whom we could talk to when we had questions or an issue.

2. The large national bank wasn’t easy to work with when it came to loans and lines of credit; they were very inflexible in the application process as well as in modifying the products they had to meet our needs.

We found that the smaller, regional bank was hungrier for our business and was willing to be more flexible to meet our needs. They didn’t seem to want to sell us products but instead wanted to know what our needs were and customize products and services that met them. With our new bank, I have been very pleased with both their support as well as their ability to be flexible.

Ron Wood, Ron Wood Public Relations Ltd.

We have switched to a credit union (Bethpage Federal Credit Union) that has no minimum balance requirement and even pays interest on our balance, plus gives us free checks. They also offer online access to our account just like banks do, and it seems to me that the staff are more courteous. To us, regardless of the state of the economy, every dollar counts.

Tip: You can let your fingers do the walking on the Internet to find a credit union that you qualify for. Check their rates against banks.

Jim Angleton, president of AEGIS Financial Services Corp.

Go online to a local community bank that is well rated, regarded in the community and is proactive toward small business and trade business.

Jeremy Schaedler, president of Jeremy Schaedler Insurance

We’ve banked with Bank of America for several years now, and although we’ve been very happy with the level of service, the account maintenance fees can be very high, especially for accounts that we have to have.  We’ll probably look at credit unions as an alternative because other major banks such as Wells Fargo seem to have
similar fees and guidelines as BofA.

3. Think about future financing and loans before you choose a bank.

David Handmaker, CEO of Next Day Flyers

Over the course of our 14-plus years, we have switched our small-business checking account. We learned it’s in our best interest to form a banking relationship that we can keep long term, and the No. 1 criterion for us is to know that financing can be available down the road. When evaluating the potential for borrowing, small-business owners should ask potential banks the following questions:

1. Are lines of credit offered?
2. What is needed to be eligible for a line of credit?
3. When would the small business become eligible?
4. What types of terms are associated with the line of credit?
5. What documentation is needed to proceed?

Companies should consider the appetite for risk of the banks in their consideration set. Community banks are often friendlier, with more personalized service; however, they are generally more conservative in their lending practices.

4. Look for technology that will make running your business easier.

Nate Lipton, owner of

I have about two credit cards, two bank accounts and a PayPal account. [Managing] all these accounts by hand was the task of all tasks. I then found out about QuickBooks Online and its module that pulls information directly from your banks.  With a little setup, it will basically do your accounting for you. It has been the single biggest
difference in making this small-business owner’s life easier in terms of accounting.

5. Communicate with your bank or credit union.

Erik MacKinnon, Gravytrain

It really pays to sit down with your business banker to explain your financial transaction model and your cash-flow situation so that they are aware of what’s going on.  As a fully online business, we’ve had a couple of nightmares with our new checking account. The first is that as a new customer it might seem suspicious to your bank when you start receiving deposits only from online sources. It really paid off to have a conversation with the bank to share the business model and inform them that large deposits would be randomly showing up in the account.

The second issue is that sometimes the bank looks at a large or unusual deposit and places a long hold on it. Again, for a small business, having a huge chunk of cash tied up can be pretty tough, especially in the early stages. This is another item that was cleared up by having an upfront conversation with the bank to inform them that a different-than-normal transaction was coming and that the funds were needed for operations. After the first hold, the bank was fine with not holding future amounts as they saw that we had a good track record.

Robin A. Driscoll, photographer and owner of RD Photo

Every small-business owner has their own reasons for switching, but if they had helpful branch advisors to help them find the best account or service, there may be no reason to change. I would suggest small-business owners start by having a conversation with their local bank business advisor to address any shortfalls they feel their banks aren’t addressing.

Melissa Chelist, owner of StorkGifts

The only thing I think I am missing is a personal banker. I do plan on going in to my local branch to attempt to form a relationship with one of the bankers. You never know what you may need in the future.

Looking to start or grow your business, and need help with financing? Be sure to compare business loans and credit cards here:

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For related information, visit NerdWallet’s resources on how to start a business. For free, personalized answers to questions about starting and financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.