The success of your business highly depends on your financial institution. Having the right bank for your business will not only lead to smooth operations for your business but will also provide the right environment for growth. How do you, therefore, go about choosing your commercial bank account ? Below are some key considerations to look into when selecting a bank for your business.
Banking business account comparator
- Excellent user experience
- Sustainability at their core
- Issues optional credit cards
- Multi-currency accounts (£ & €)
- Mastercard pre-paid contactless debit card
- Instant spending notifications
Know Your Banking Requirements
Do you want to borrow or improve your credit score? Do you need pieces of advice on investment? What of the other services the bank offers, such as automatic payments and credit card processing? Knowing exactly what you need from a bank will help you to choose the right bank.
For example, if having a personalized customer service is a priority in your list, do not be reluctant to put a bank to the test. Call and make an inquiry related to your business. Find out how long it takes to get through to an informed person. Request information via email or use the contact form on their website. Have you received feedback within 24 hours? You’ll then know in advance if a bank shows sincere devotion to quick responses and client service.
Consider the Business’s Magnitude
In the banking sector, scale is important. But that does not mean the bigger the better. You need to assess the needs of your business and your ease to decide if you want to work with banks of small communities or large national banks. Bigger banks have many branches, offer a variety of resources and financial products. They provide an extensive range of credit options and benefits of opening an account.
Smaller community banks work more actively by adapting local market conditions to your individuality and overall situation rather than relying on numbers on your credit ratings. Small credit banks are more eager to charge lower rates to win your business.
Note that you need to establish an individualized relationship with your banker, regardless of whether you need the resources and diversity of a large bank or the local proficiency of a small bank. You will work with this person and it will be helpful to build a good relationship in case you have a fee or if you miss a payment. So, meet up with bankers at both the small and big banks. Talk to them and see what they can offer you.
Check your Credit
Larger banks are over-particular when choosing the businesses they want to work with. This means that if your credit rating is low or if your business is new, it’s difficult to secure an account with a large bank. Smaller local banks are more tolerant of new local businesses and their credit requirements for account opening and credit lines are less strict.
Go through the credit requirements of the bank, you plan to partner with for your business.
The main function of your commercial bank account is to help you trade apart from literally holding your money. Transactions include cash or check deposits, withdrawals, remittances, and electronic payments.
This is a very important aspect of your account. It is important to note that your current account allows free and unlimited offers. If not, please inquire about the number of offers available before the bank charges you. If your bank offers 500 transactions per month before charging you, but you rarely reach that number, the cost after 500 is negligible. If you publish over 500 transactions on a monthly basis, you will need to look for other options.
In addition, note that some banks offer “hierarchical” business accounts whose basic plan is to charge customers after a certain number of deposits or transactions, while more complex versions offer unrestricted transactions.
In-person vs Online Services
Do you want a bank with a physical branch that you can access, or do you do most banking on the web? It depends on the business you operate. Companies that do large cash transactions and have to make direct deposits in convenient locations are looking for banks with local branches. If you operate an e-commerce business and conduct all online transactions, you may not need to set up physical branch offices. In addition, online banks have certain advantages, such as high-interest rates. Most real-world banks cannot do this.
Make sure you check whether your account provider has powerful online banking features, including apps to help you control your financial situation anywhere.
Your merchant account will charge a small monthly fee that your bank will consider a “service fee.” The more powerful your account is, the higher the service charge.
The most reasonable service charge is £12 to £30 a month. Although a few extra pounds a month may have little impact, it’s usually not worth paying too much to maintain your account. In addition, service charges may be waived if some businesses meet certain criteria, such as high minimum account balances or register other financial instruments with the same bank. Be sure to ask what steps you can take to get rid of the claims.
National banks have deep network connections and are at the forefront of the convenience of online banking. In fact, most large bank customers typically handle almost all of their banking transactions through the customer portal. However, these online banking systems are optimized to work with most businesses. As a result, companies with more complex needs rarely have flexibility or customization options.
Unfortunately, community banks lag and access to online self-service options is often limited. Although small business owners can easily access community bank funds, it is disappointing that they cannot handle simple banking outside office hours and without involving bankers.
Access to Credit
The largest national banks have little flexibility as they make financial support and credit decisions on numbers. Since these banks operate at the national level, they rarely take local market conditions into account. If your business model is not ubiquitous, they are unlikely to examine it.
Community banks have great flexibility in decision-making. Several factors can be taken into account, such as the local market and the nature of the applicant. Small business owners trying to start a business should work with community bankers rather than seeking a loan or line of credit from a larger national bank.
Where is the bank? Think of your bank near your office, your family, a business trip, etc. Do you need to deposit daily or weekly? Do you often withdraw money for work? Do you need a certified check issued by the bank? Do you need to travel on business and need to use national ATM’s for free?
Consider the nature of your business and the frequency with which you have to go to the bank before deciding. If you have to enter the bank several times a week, choose accordingly. In the same way, if you travel across the country, you will need a reliable bank from coast to coast.
What kind of support do you need?
Some banks have staff to help you manage and grow your business. These professionals can be valuable when you are developing your business. They may manage your account, fund growth, and make recommendations on how to grow your business. They can also assist with fiscal and wage problems.
When choosing an account, take into consideration the support you need to grow and change your business. If the resource can be used for the growth of your business, consider its availability when choosing a bank. You can always find outside experts, but internal experts already know you, your business and your finances.
Look into the Bank’s Reputation
Other business owners in a similar professional field can share their experiences with banks and help you navigate in the right direction. Get to know how contented they are with their banking services and whether they are ready to lend and provide relevant banking guidance.
Also, check whether local banks are eligible to be Small Business Administration (SBA) loaner. If you apply for an SBA loan, establishing a relationship with an SBA-sponsored bank can facilitate the approval process.
The SBA Preferred Lender Plan is a plan that helps identify banking institutions that carry out large SBA lending. According to the SBA, these lenders have adopted a simplified process of paper processing, making it easier for small business owners.
Establish an Ongoing Relationship
After choosing a bank for your small business, commit to create and build relationships with a banker who knows what you want for your business. Ideally, this person can identify a way to support an idea you have not considered and eventually become a useful resource in case of a financial emergency. Your banker can also help you plan for on the type of banking service you’ll require in a year in advance.
Flexible Debit Cards
If you have only one employee in your company and will always have one, go to the next section. However, if you plan to add someone to your business, we recommend that you also provide a debit or credit card for them. Credit cards are more common for a variety of reasons, but this does not mean that your bank account should limit your choice.
Most banks and credit unions have the option to add cardholders and select initial and purchase limits for these cards. This allows employees to buy what they need for work, but will not steal the contents of your bank account.
Some banks charge for this feature while others do not offer it at all. If you think you’ll need to add an employee’s debit card, be sure to do so while giving priority to your business’s financial security.
Once your commercial bank account is up and running, it will need to function with your accounting and budgeting software and any other services of your choice. The most common of these services is QuickBooks, but there are other financial systems to consider, such as Due.com invoices.
The ability to send and receive unrestricted ACH transmissions is useful for online business, regardless of the service you use.
Trust your Gut
After all, you are building a relationship. Do you think the bank is suited to your business and its needs? You want to familiarize yourself with the bank and trust the institution. It’s worth finding the bank that really identifies with you and your business. Keep looking if it doesn’t feel right.
Top Business Banks in The UK
Lloyds Bank is part of the Lloyds Bank group, the largest banking provider in the UK, including Bank of Scotland, Halifax, TSB and Scottish Widow. The origins of Lloyds Bank go back to the establishment of the bank in 1765.
Lloyds Bank has opened a commercial bank account focused on turnover and adjusts its services according to the size of the company. They base their classification on sales of less than £3 million, ranging from £3 million to £25 million and over £25 million.
Commercial bank proposals apply to new and existing businesses as bank accounts are flexibly designed to support business growth and development.
Metro bank is perhaps not one of the most famous banks in the UK, nor one of the most mature banks, but they offer different styles of services to modern businesses. If you book a minimum balance of £ 5,000, they will give a bank account with no monthly fees and 50 free transactions per month.
To acquire a Metro bank’s account, you must be at least 18 years of age and have an annual turnover or balance sheet of not less than £2 million. At least 50% of the commercial actions must be owned by residents of the United Kingdom and at least 50% of the commercial administrators or substantive owners must also be residents of the United Kingdom.
Metro bank offers flexible banking services that allow you to access your banking and online banking accounts, by phone or on the move, via online banking and mobile applications. Metro bank also has a network of local business leaders in the Metro bank store that can provide support and advice.
Barclays offers two price plans from which customers can choose. This is a hybrid payment plan and a payment plan. A hybrid payment plan is for businesses that use cash, checks and other methods to make payments. The payment plan is mainly intended for companies that receive and make electronic payments via bank and debit cards online.
Barclays rewards customers with loyalty, allowing them to repay a portion of their monthly bill. They calculate this amount based on the length of time they made bank transactions and the annual credit turnover rate. Loyalty offers apply between 5% and 50% of the monthly fees of your account.
Types of Business Accounts
Business Checking Account
The checking account provides a basic account for deposits, withdrawals, and payments by check. Although paper checks are gradually losing their popularity, they are an important feature of checking accounts. Recently, debit cards (or check cards) have been used as the primary means of payment for checking accounts. Most banks now offer online bill payment services via a current account, which simplifies payments.
Business Certificate of Deposit
Typically, CD account revenues may be greater than any of the other accounts. This is because they have minimal monthly fees and have high-interest rates. However, you must keep some money on the CD for a while. For example, suppose you are using a 6-month CD or an 18-month CD. In other words, you have to lock the funds for 6 or 18 months.
Money Market Accounts
Money market accounts are more profitable than savings accounts or checking accounts, but combine these two functions. For those who deposit higher balances in their checking account, this may be an excellent choice for cash parking. A higher interest rate means that your money is working for you as it is gaining good interest.
Neo or Mobile banks
Neobanks are virtual financial firms that offer mobile-only or digital financial services. Some of the services they offer include;
- Savings and checking accounts
- Money transfer and payment services
- Loans for businesses and individuals
- Other services, including budgeting help and more
Advantages of Neobanks
Why choosing a neobank for your business could be a good option ?
It allows for the delivery of paperless statements to your clients via email. This reduces paperwork and in the long run, is environment-friendly.
With neobanking clients can access their accounts via their phone and need not go to a physical bank. This makes it convenient for clients to access banking services.
Super-fast Customer Service
This type of banking allows customers to sign up for the service with just a few clicks on their smartphone devices. Also, clients can make payments and receive money much easily with this type of banking. Finance management is always at the palm of their hands.
Choosing the right bank for your business will highly influence your business’s success and growth. Having the right bank will simplify financial operations and provide you with the relevant support to grow your business.