Opening a business requires careful decision-making, and one important choice that is often overlooked is selecting the right bank. The bank you choose can have a significant impact on the success of your business. While your personal bank may be convenient, it may not necessarily offer the best services for your business needs. That's why we have compiled a list of the best banks for small businesses to help guide your decision-making process.
How We Determine the Best Banks for Small Businesses
When evaluating banks for small businesses, we consider several key factors that are similar to the criteria you would consider when choosing a bank for personal finances. These factors include:
Fees
The best banks for small businesses offer no-cost checking and savings accounts and have minimal maintenance, transfer, and foreign transaction fees.
Interest
Earning interest on your business savings is crucial. We recommend choosing a bank that offers competitive interest rates to help grow your business savings account.
Loans
Many small businesses rely on loans to get started. The best small business banks offer reasonable terms, low-interest rates, and may even provide incentives for opening an account.
Cash Management
Cash management services are essential for small businesses. Look for banks that offer automated payment options, reinvestment of earnings, and easy contribution to savings funds. These services can help streamline your financial operations and reduce your workload.
Rewards
A rewards program can benefit all businesses, but it is particularly important for those that make frequent purchases. Look for a bank that offers a rewards program that can help reduce your operating or travel costs.
Minimum Balance
Choose a bank that does not require a high minimum balance, as it may take time for your startup business to generate sufficient cash flow.
Customer Service
Good customer service is essential for any small business bank. Look for banks with helpful and responsive representatives who provide excellent service. Additionally, choose a bank that offers online tools to manage your finances conveniently.
Choosing the Best Bank for Real Estate Investors
Real estate investors have unique financing needs, and not all banks cater to these requirements. When choosing a bank as a real estate investor, consider the following factors:
Access and Security
Look for banks that prioritize access and security. The ability to easily manage your funds and access your accounts is crucial for real estate investors.
Diverse Loan Options
The best banks for real estate investors offer diverse loan options, catering to the specific needs of this niche. Look for banks that provide financing for commercial real estate, fix-and-flip investments, and mortgages.
Loan Benefits and Rates
Consider banks that offer lower interest rates and favorable loan terms for real estate investments. Some banks may even cover lender closing costs for commercial real estate financing.
The 10 Best Banks for Small Businesses & Real Estate Investors
We have evaluated numerous banks to help you find the best options for small business and real estate accounts. Here are our top 10 recommendations:
- Wells Fargo
- Chase
- Bank of America
- Capital One
- U.S. Bank
- NBKC
- Radius
- KeyBank
- PNC Bank
- Digital Federal Credit Union
To learn more about each bank and its specific offerings, visit our detailed guide here.
How to Choose the Best Bank for Your Small Business
Choosing the right bank for your small business requires careful consideration. Here are some factors to keep in mind:
- Your Company's Financial Plan: Consider whether your business needs emphasize savings, frequent transactions, or multiple checking accounts.
- Funds Available: Choose a bank with a minimum balance requirement that fits within your budget to avoid fees.
- Loan Requirements: If you need financing, opt for a bank that offers the type of loan you need with favorable rates and terms.
- Bundled Services: Some banks offer additional services like tax preparation and payroll. Assess whether these services would streamline your business operations.
- Business Expenses: If your business requires a credit card, consider banks with rewards programs that can help reduce costs.
- Location: Opt for a bank that is accessible, with branches or strong online banking features based on your preference and location.
Remember to conduct thorough research before opening an account and consider the specific needs and goals of your small business.
What You Need to Open a Business Bank Account
To open a business bank account, ensure you have the following documents:
- Employer Identification Number (EIN) or Social Security Number (for sole proprietors)
- Business formation documents, ownership agreement, business license, and business name certificate (if applicable)
- Photo ID (bring more than one if possible)
Please refer to the banking website for any additional requirements.
In conclusion, choosing the best banks for small businesses and real estate investors involves considering factors such as fees, interest, loans, cash management, rewards, minimum balance, and customer service. Real estate investors should also prioritize access, diverse loan options, and favorable rates. Take into account your business's financial plan, available funds, loan needs, bundled services, business expenses, and location when selecting a bank. With the right research, you can find the perfect bank for your small business or real estate investment needs.