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Ask How To Pick a Bank

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By | May 20, 2012

Dear Toolkit,

At long last, I'm ready to open a checking account for my new business. What should I look for when I go to pick out a bank?


Ready in Raleigh

Dear Ready in Raleigh,

When you set out to audition banks, start with the one where you carry your personal account. Then, ask some local small business folk where they do their banking—and why. For many small business owners, a community bank may offer the personalized service needed for your operation.

You also may want to call the Small Business Administration (SBA) at 1-800-827-5722 and ask them to send you a list of the banks in your area with good small-business-lending track records. (The SBA keeps detailed records on these matters, and they are flattered when someone takes an interest in their diligence.)

When interviewing your list of candidates, here are some of the things you'll want to ask each of them:

  • What fees—exactly—do they charge for various types of transactions? (For example, do they charge each time you make a deposit? Don't laugh—a lot of banks do exactly this!)
  • How about their Merchant Account fees?
  • Are they part of the SBA loan program?
  • What kind of minimum balances might they require?

And here are some things you'll want to ask yourself:

  • Do these people seem to understand my kind of business?
  • Will I be dealing with a specific officer each time or will they shuffle me around?
  • Is their location convenient to my business?
  • Do they offer the kind of special services I might need—such as night depository facilities, for example?

Comparing the answers to these basic queries will give you a sensible framework on which to hang your decision.

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