Business Bank Accounts: How To Choose a Bank For Your Small Business

You may think that opening a Bank account doesn’t rank high on your priority list. However, once you have committed yourself to starting up a business very quickly you will start to incur expenses and a business account cheque book would come in handy! Getting all your business related expenses channeled through a business account will ensure all your expenses are in one place, something your Accountant will be happy about at your year-end.

How to Choose a Bank

Despite what most people think, business banking is not limited to the Big Four Banks. Most former and existing building societies have entered the small business market over the last few years. With competition increasing you can get some good deals if you are prepared to shop around.

So what criteria should you use when looking for a Bank and a safe home for all your cash?

Your Existing Bank

If the Bank where you have your personal account offers business banking facilities then this may be a good place to start. You already know their level of service (good or bad!), the layout of the branch and perhaps some of the staff if you are lucky! This can make the whole process much easier.

Location

If you have no preference for a particular Bank, location of your Branch may be more of a priority, especially if you will be paying in a lot of cash where a bank just around the corner would be useful.

Go Hunting

If you have no Bank in mind, visit as many as you can so you can make an informed choice. Ask to speak to the Small Business Manager or Advisor (each Bank has their own job title). Tell them you are interested in opening a Business account and that you are looking for information. The good ones will spend time with you, offer you brochures, talk you through the process and the leaflets and tell you about their range of services. How you are treated at this early stage will give you a good idea of how you are likely to be treated later on. Ask questions such as,

-         Do they offer on-line banking or telephone banking?

-         Will you have a named point of contact?

-         At what point will you be able to apply for overdrafts or loans and what are the standard terms?

-         Do they provide help and support?

-         What are the charges to operate the account?

-         If you decide to open an account with them, what information will they need from you to open the account?

-         Do they offer an opening incentive such as 12 to 18 months free banking?

After the interviews, assuming the person you have been speaking to is going to be your point of contact, ask yourself whether you could get along with him or her. A good relationship with your Banker is important.

Having visited all the local Banks review the leaflets you have collected and any notes you have taken and list the good and bad points and any general impressions you had. Which Bank stands out and is one that you felt most comfortable with? Make an informed decision based on all the information you have gathered.

Opening a Bank Account

Having made your decision, go back or call up to arrange an appointment. To open your account you are likely to need the following:

-         a completed application form (usually filled in during the meeting)

-         identification such as a Passport or Driving Licence

-         2 utility bills to confirm your address

-         if you are a partnership each of the partners will have to supply the above information

-         if you are trading via a Limited Company you will need the Memorandum and Articles of Association

-         a Bank Mandate showing a specimen signature and confirming who is to sign for partnerships and Limited Companies – supplied by the Bank

-         possibly a copy of your stationery or letterhead if you have got that far

Basic Services You Will Need

As a minimum you will need a current account with a cheque book and paying in book. But you may also need:

-         Business savings account for all that surplus cash!

-         A cash card to access to cash 24 hours a day in case you come across that hard-to-resist deal after banking hours

-         On-Line or Telephone Banking

-         A Business credit card

-         Merchant facilities if you wish to accept Credit Cards

It is important for you to pick a Bank you feel comfortable with. They need to be there for you when you need them.

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