Community banks are a critical resource to small business owners and one that sometimes get overlooked. Due to their local focus and personalized service, community banks are well equipped to support small business owners during the many stages of their business growth and evolution.
Ways community banks support small businesses
Business Advising Services
Many community banks offer business advising or consulting services to help local businesses thrive. These services can include financial planning, tax advice, and strategic business planning.
Community Development Programs
Community banks may be involved in local economic development programs that offer grants, special funding opportunities, or incentives for small businesses to grow and succeed in the community.
Local Branches and Networking Opportunities
Community banks often host or sponsor local business events, workshops, and seminars that can be great networking opportunities. Participating in these events can help you connect with other local business owners and potential customers.
Tailored Financial Products
Community banks typically offer financial products specifically designed for small businesses, including business loans, lines of credit, and business checking accounts. These products are often more flexible and tailored to meet the unique needs of local businesses.
SBA Loans
Many community banks are participants in the Small Business Administration (SBA) loan programs, which can provide more favorable terms for new or growing businesses. These banks often have the expertise to guide you through the SBA loan application process.
Digital and Mobile Banking Tools
While community banks are smaller, many have invested in technology to provide digital banking tools that are competitive with larger banks. These tools include mobile banking apps, online payment services, and fraud protection services.
Personalized Customer Service
One of the biggest advantages of community banks is their focus on customer service. Having a personal relationship with your banker can be beneficial, especially when you need flexible solutions or quick decisions on business finances.
What To Look For in a Community Bank
To find the best community bank for your small business, consider the following:
- Check local business associations or chambers of commerce for recommendations.
- Visit bank websites to compare their business banking products and services.
- Read customer reviews to gauge the quality of service and customer satisfaction.
- Meet with bank representatives to discuss your business needs and see how they can support your growth.
These steps will help you choose a community bank that not only meets your financial needs but also supports your business’s overall goals.
How to Select a Small Business Bank Account
Selecting the right bank account can make a big difference when it comes to managing your small business’s finances effectively.
Here are key aspects to consider when choosing a small business bank account:
- Low Fees: Search for accounts with minimal fees for transactions, maintenance, and service charges. Some banks offer fee waivers if you maintain a certain minimum balance.
- Ease of Access: Ensure that the bank offers convenient access to your funds. This includes online and mobile banking capabilities, a widespread ATM network, and, if necessary, physical branches close to your business.
- Interest Rates: Consider whether the account earns interest. For businesses that maintain high balances, earning interest can offset some banking costs.
- Transaction Limits: Some accounts have limits on the number of free transactions per month. Make sure the limits meet your business’s average monthly transaction volume to avoid excess fees.
- Lending and Credit Options: A bank that offers a range of credit products, such as lines of credit, term loans, and credit cards, can be invaluable as your business grows and needs additional funding.
- Merchant Services: If your business accepts credit and debit card payments, look for a bank that offers merchant services. Check their fees and ensure the bank’s offerings are compatible with your sales volume and payment needs.
- Customer Service: Good customer support is essential. You want a bank that provides responsive and knowledgeable assistance. Reading reviews and asking for recommendations can help gauge a bank’s service quality.
- Additional Services: Some banks offer additional perks like business advising, payroll services, and tax prep assistance. These can be beneficial as your business needs evolve.
- Safety and Security: Ensuring that your funds are safe and that the bank uses up-to-date security measures to protect your account information is crucial.
Is It Important to Have a Bank Account as a Small Business?
Yes, having a small business bank account is highly advisable for several important reasons:
- Professionalism: A dedicated business account presents a professional image to your customers and suppliers. It shows that you are serious and established, which can help build trust.
- Financial Management: A separate business account makes it easier to track business income and expenses, which is crucial for effective financial management and budgeting.
- Tax Purposes: Keeping your personal and business finances separate simplifies tax preparation, making it easier to claim business expenses and deductions accurately. It also provides clear documentation in case of an audit.
- Legal Protection: For businesses structured as corporations or limited liability companies (LLCs), a separate business account helps maintain the legal distinction between personal and business finances. This separation can protect personal assets from business liabilities.
- Credit History: A business bank account can help you build a credit history for your business, which might be beneficial if you seek business loans or credit lines in the future.
- Banking Services: Business accounts often come with features and services tailored to business needs, such as merchant services, payroll management, and business credit cards.
