6 Essential Small Business Banking Tips

When choosing a small business bank account, you'll need to consider how quickly they can process payments, how they handle digital transactions, and what types of business financing they offer.

In this post, we’ll share six small business banking tips to help you choose a bank that will meet your business banking needs — now and in the years to come.

6 Small Business Banking Considerations

Here are some steps to take and points to consider as you search for small business banking services:

1. Prioritize Your Specific Banking Needs

Prioritizing your needs is an important first step in choosing the right bank for your business. You’ll need to clearly define your business goals now, but also create a short- and long-term plan for your future banking needs.

Your business might be a local, self-funded, one-person organization right now, but that could change quickly. Your research should consider the following questions:

You should also factor in your business credit score when selecting a bank. Business credit scores are typically low (or nonexistent) for new businesses, which impacts the type of financing you'll qualify for and how much money you can borrow. 

2. Choose the Best Business Checking Account for Your Needs

Once you've prioritized your needs, you can start scoping out checking accounts at various banks. Asking the right questions is critical. Here are some questions to ask that will ensure you cover your business banking bases:

3. Remember, It’s OK to Switch Banks

If you're unhappy with the service you're currently receiving, don't be afraid to shop around for a new bank. 

At a minimum, you should separate your business and personal accounts. In a recent study, about 30% of the 300 small business owners surveyed were using their personal accounts for their business.

Your current bank may not meet your business's needs for a variety of reasons — you’ve outgrown them, you need faster payment processing, you need more comprehensive support, or you want to connect other finance tools to your account. Switching to a bank that supports the way you run your business can help you better manage cash flow, avoid fees, and improve your overall banking experience. 

4. Read the Fine Print

Understanding “the fine print” — fees, minimums, features, and options — helps prevent surprises and ensures you're getting the most out of your business account. 

Make sure you fully understand what fees your bank might charge (e.g., flat fees, transaction fees, late fees, etc.) and why. This helps you avoid fees when possible and anticipate them when not. 

5. One Account vs. Multiple Accounts

Deciding if you need one or multiple business bank accounts depends on your current business operations, goals for the future, and growth plans. 

For new businesses and startups, a single business account may suffice. At the same time, businesses often benefit from having separate accounts for unique business needs. For example, you may have your primary checking account for general business operations and want a separate account for payroll. Or, if your company is business-to-business (B2B) and a large portion of your revenue comes from invoices, you may want a dedicated accounts receivable account. 

6. Banking Locally vs. Banking Online

While there are advantages to both banking locally and online banking, this decision boils down to what makes the most sense for your business. A local brick-and-mortar location may seem appealing because of the personal interaction, or a relationship you’ve already established with your personal banker. An online banking provider is more likely to offer speed, convenience, and scalability as your business grows. 

Some businesses opt for a hybrid approach. They have one business account with their local bank for certain business purposes and a digital bank for others. Digital banking platforms can provide a more comprehensive experience with integrations to other finance ops tools, such as accounting software and payroll services.

Aion's platform allows business users to create multiple accounts for different users with varying permissions. We also make it easy to share financial information across systems using one secure platform. Other tools like automated bill pay, invoice management, and data insights help businesses keep track of their cash flow and manage their finances on the go. 

Small Business Banking Is Personal

Whether you’re deciding if you want to bank locally or use an online provider (or both), or you’re debating how many accounts you should open, the key is to thoroughly evaluate your options based on your unique business needs. 

Identifying your business’s financial priorities and understanding your growth goals will help you choose a banking solution that supports and scales with your business.