Location, Location, Location

This may be one of the most important factors in selecting the best bank for your commercial lending needs. Consider banks that are not just in your state, but in relatively close proximity to your business location, branch offices, and general area of operation. Why? Because having your bank nearby can help you develop a stronger relationship with your banker(s) and give you access to financial guidance and expertise from people you know and trust. If your business requires frequent travel, will you be able to access branches while away? 

In addition to the location of the bank, you also will want to consider the digital services the bank offers to commercial clients.  If it is important to you to have anytime, anywhere access to information about your business accounts, for example, be sure to take a look at the online and mobile banking services offered.  If making check deposits from your office is important, then be sure to ask about the bank’s remote deposit services.  While these types of services are available at most banks, the features, options, and pricing vary. 

Bigger Isn’t Always Better

Size is going to matter when you pick your bank, though maybe not in the way you’re anticipating. While larger banks may have the more significant financial muscle to offer services and facilities, they often have higher fees and charge for more services than smaller banks.

Big banks will often win in the context of a variety of services, branch locations, and resource availability. They are also going to be more likely to have a wide range of credit options and are usually running some kind of new account or credit line bonus or other perks. However, when it comes to loans or lines of credit, big banks generally are less flexible in their underwriting and more likely to use an automated process for credit decisions that may not work in your favor.

Smaller banks, often town or community banks, will be far more in touch with the local market. This means that if you are able to work with a small bank and develop a good relationship, they may be much more likely to make certain decisions with more subjective eyes. You may be able to secure a line of credit with more reliance on your profile, character, and ability to hold up your end of the agreement, rather than a hard and fast credit score cutoff. You may even be able to negotiate a lower rate or less fees, in return for your business’ patronage.

Either way you decide to go, make sure you put significant effort into building a good relationship with your banking representative. You will be working with them relatively frequently, so having a trouble-free relationship can help tremendously when you have questions or issues or need some guidance on how best to meet your objectives.

Internet Banks Are Useful But Warrant Caution

Online banks and fintech startups are becoming hugely popular and can offer a staggering array of services at uncommonly low fees or costs. This does come with the downside of not being traditional banking brands in many cases, and not having many (if any) brick and mortar facilities. This means you will likely not be able to have one-on-one banking relationships like with other banks. These will likely only be useful to a point, and frequently only with businesses early in their development.

Plan For Potential Lending Needs

If you operate a smaller business, and you may have the need to work with the SBA for potential loans, make sure you are considering banks that are also recognized SBA lenders. Check out the list of SBA-friendly lenders and see if there are banks in your state that may fit your needs. Have a chat with an SBA loan officer and weigh the potential benefits of screening your banks based on a potential future SBA loan.

Digital Needs Should Be Weighed As Well

Think about how you will need to incorporate technology into your banking routine. Will you need digital banking services?  Online financial management tools?  Comprehensive online reporting services? Online bill payment and funds transfer services?  Be sure to think about what will make banking and financial management convenient and effective for your business and review the options available at the bank you are considering working with.No matter what type of business you manage, some type of quality digital options will be invaluable.

What Services Will Your Business Need?

Just in general, think about all the things you may need from your bank. Obviously, you’ll need a business checking account but do you need more than one?  Would it be valuable to you, for example, to manage your payroll expenses from a separate account?  You may want to provide select employees with some business account access through a business debit card and/or provide access to credit through a business credit card account.  To maximize your cash flow, you may want to consider a “sweep” account so that excess funds for your business are moved automatically to an interest-bearing  account.

Make sure you look into these services and products, as well as how much they will cost you initially and in recurring fees. Many firms still charge fees for checking accounts, like this was still 2004, so make sure you pay attention to the money they will take for services that many banks offer for free.

Look For Perks and Other Benefits

Not that it should weigh heavily, but it could break a close tie. Check out any special offers or additional benefits you may get by opening an account. Sure, it could be a discount on another service that you are not interested in – butit could be a cash bonus or deposit match. They may even offer free payroll services, tax prep help, hotel & car rental discounts, or even lower insurance rates through select companies. Ask. Worst case scenario, you grab a free pen on the way out.

Look At Their Support Capability and Track Record

Are other customers happy with the support they get when they have a problem? If not, why? You will, in all likelihood, have a problem at some point and will require their support personnel. You may be able to solve most issues with a chatbot, but if not, you’ll need a human. If the bank does not have a good reputation for providing quality personal service, be aware before you make your decision.

Go With Your Gut

Once you’ve looked at all the numbers, the features, the products, and the rest. Stop. How did they feel? Think about where you felt most comfortable, and which one felt like your bank. Then choose.