How to Choose a Bank for Your Business

If you are just starting out in business you probably have had to go to a bank to discuss your financial requirements. It’s often hard for small businesses to find a bank they can use for their business transactions mostly because they do not really know what services they should be expecting to get from a business account besides, cheque account facilities etc.

Business banking is very different from personal banking and a business oriented bank will not present these two types of banking in the same way. The basic services you should expect from your business account are a current account, a savings facility and loan facilities. A bank that offers you more than products but a service such as your own financial manager who will advise you about money matters cares about the financial success of your business. It’s would be the kind of bank that won’t let you flounder and will avail services that make it easier to do business 24/7.

When choosing a bank for your business, you should choose one that has a good online service. You need to be able to pull out statements and transaction information from anywhere at any time as well as have someone on hand to go through your statements on the phone or direct e-mail. The four major banks in South Africa offer the basics, the differentiating factor for these institutions is the level of sophistication in the products they offer their business clients. All four of these major banks have products that integrate online banking with traditional hands-on banking.

Traditional Banking vs Commercial banking

When you are looking for a bank that can offer you more than services but be your main source of capital then you should find a bank that will not treat you any less than they would treat customers who aren’t indebted to them. The fact that you took out a bank loan for your business does not necessarily make your bank a partner in your business but it is in the best interest of the bank that you succeed in making your enterprise financially successful so that you can service your loan and expand your business.

Unfortunately, South Africa does not have a variety of financial institutions to help small businesses. When borrowing for business you need to look at the options that are available. There are three scenarios that could set one business banking package apart from another, these are: real estate financing for small business, working capital loans, and business management services for credit card processing. Businesses that accept credit card payments might be able to use that as leverage to obtain a business cash advance. Credit card processing services can improve the bottom line for businesses that have a high volume of credit card usage.

When it comes to business financing, banks are a bit hard-nosed. Most commercial banks will have guidelines about the type of industries they will readily give start-up loans for. Bank loans come with a lot of red tape and contractual clauses that need to be signed of on. If you are a small business looking for a bank loan you should shop around. One bank may reject your application while another might give you a loan “on condition?. Before you jump at the chance, understand the conditions that they are setting for you and consider the long term consequences for your business as well as your long term relationship with the bank itself.

For your business’ capital needs you could look outside the banking fraternity for a loan but you will still need to have a bank to manage your finances effectively. Choosing one bank does not oblige you to look for all your financial needs from that one institution.

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