10 Best Banks for Small Businesses & Real Estate Investors
There are many important decisions to make when you open a business, but one of the most overlooked decisions is choosing a bank. The bank that you use for your personal finances is not always the best one for your business. Every bank provides different services, and their fees may vary wildly from one bank to the next.
You need to make sure that a bank is well-suited for your company’s banking needs before opening an account with them. If you need a little insight to guide your decision, check out our list of the best banks for small business.
How We Rate the Best Banks for Small Businesses?
How do we determine the best banks for small businesses?
We weigh several different factors, and they’re not all that different from the criteria you’d use to choose a bank for your personal finances.
- Fees: The best banks allow you to open a checking or savings account at no cost. Some may even allow you to open multiple checking and savings accounts. Furthermore, the optimal business bank will have minimal maintenance fees, transfer fees, and foreign transaction fees—or none at all.
- Interest: Since you’re going to have lots of money in the bank, you want to earn as much interest as possible. Interest is a great way to make a little extra money to contribute to your business savings account.
- Loans: Many small businesses need to secure a loan to get started. In some cases, the loan pays for basic startup costs: buying equipment, developing a website, covering salaries, etc. The best small business banks offer loans with reasonable terms and great interest rates. Some banks may offer incentives for opening an account with them, too.
- Cash Management: The best small business banks have cash management services. Cash management refers to a broad array of services designed to help you manage the money sitting in your accounts. They’ll enable you to make automated payments, automatically reinvest earnings, or contribute to savings funds. These automated services will help your business meet its financial goals while also reducing your workload.
- Rewards: All businesses can benefit from a rewards program, but it’s crucial for businesses that make lots of purchases on a company card. A good rewards program can help you reduce your operating or travel costs.
- Minimum Balance: The best small business banks don’t require you to maintain a high minimum balance. It might take a startup business several months to build a cash flow. Some businesses open with hardly any money in the bank—often the case with sole proprietors. Look for a bank that requires a low minimum balance or none at all.
- Customer Service: Last but not least, a good small business bank should have excellent customer service. Bank representatives should be helpful and responsive. Furthermore, it should be easy to open an account, and there should be plenty of online tools to help you manage your money without visiting a brick-and-mortar branch.
How To Choose The Best Real Estate Bank?
There are numerous banks geared towards real estate investors and their specific financing needs. However, they don’t all offer the same benefits or level of expertise. When investors are choosing between banks, consider the above criteria. Often the best banks are those that prioritize access, security, and provide diverse loan options. These factors are crucial to the many demands of real estate investing.
If you already have an existing bank account you are unhappy with, take time to write out why. This will help guide you as you search for a better option. While it may seem easier, selecting the same provider for your business and personal needs may not always be the best fit. While many small business owners opt for the same bank, they are often left unsatisfied with the experience overall.
Prioritize your needs for the future by reviewing each of these considerations. Are you hoping for a bank with checking and savings options? What about the opportunity for multiple mortgage loans? Keep each of these factors in mind as you review some of the options below.
10 Best Banks for Investors & Small Business Accounts
We evaluated accounts across numerous banks to help you find the best options. If you are interested in an investor or small business account, here are 10 of the best options:
- Wells Fargo
- Bank Of America
- Capital One
- U.S. Bank
- PNC Bank
- Digital Federal Credit Union
How to Choose the Best Bank for Your Small Business?
As you can see, there are plenty of great banking options for your small business. How do you know which bank is right for you?
Consider the following:
- Your Company’s Financial Plan: How will your business organize its money? Do you want to prioritize savings? Do you need to make transactions frequently? Does your company need multiple checking accounts for different departments, or just one?
- How Much Funds You Have: How much money will your business have from the get-go? Make sure that you choose a bank with a minimum balance that falls within your budget—so long as you want to avoid fees.
- Whether You Need a Loan: Do you need financing to get your business off the ground? Choose a bank that offers the loan you need and which has the most favorable rates and terms. You don’t necessarily need to open a checking/savings account with this bank, but some banks offer favorable incentives for borrowers. You could earn some great benefits.
- If You Want Bundled Services: As you’ve learned, it’s not uncommon for banks to offer additional business services, like tax preparation, payroll, and more. Often, it’s cheaper to pay for these services outside of a bank. But taking advantage of bank-provided business services does tend to streamline your business operations. You can keep yourself organized by taking advantage of bundled services.
- Your Business Expenses: Will you have expenses that may warrant one or more business credit cards? If so, you might prefer a bank that offers a great rewards program. Over an extended period, a good rewards program can help you cut down on certain costs.
- Your Location: Choose a bank that’s accessible. Sometimes you may need to speak to an in-person representative, so it’s better to choose a bank with a brick-and-mortar location nearby. But if you live in a more remote area, you can always choose a bank with strong online banking features.
Only you can decide which bank is right for your small business, so be sure you do plenty of research before you open an account anywhere. It’s always a good idea to shop around!
What Do You Need To Open A Business Bank Account?
The items needed to open a business bank account are pretty straightforward. Before applying for a new account, make sure you have your employer identification number (EIN) (or your social security number if you operate as a sole proprietorship). You will also need your business formation documents, ownership agreement, business license and business name certificate (if applicable). Next, you will need some form of photo ID, though it does not hurt to bring more than one. Double check the banking website to ensure nothing is left out. With these documents handy, you should be ready to open a business bank account.
What criteria can you use to find the best banks for small business? Find out whether the bank has low fees, high interest earnings, borrowing options, cash management solutions, rewards programs, low minimum balance requirements, and great customer service. Before you start shopping for a small business bank, be sure you understand your company’s financial goals. Know your company’s financial plan, how much startup funds you have available, whether or not you’ll need a loan, and which types of banking services you need to be successful. If there aren’t many brick-and-mortar banks in your area, you can always turn to an online bank.
Read the full article, click here.