Herman J. White, Senior Vice President, Commercial & Business Banking, TECH CU has advice on selecting a bank for your start-up.
When setting up an account, it is important that the business owner has all the appropriate documents necessary to set-up the new account – Personal ID, Company Tax Identification Number, Formation Documents (Corporation, LLC, etc.), Fictitious Name Statement (if applicable).
Banks, Credit Unions and Financial Institutions all offer the same basic services – checking accounts, savings accounts, online banking, etc. If a business owner is only interested in price, they should shop for the cheapest account or a free account. However, they will get what they pay for. A small business finance relationship or strong business banking partnership can add a lot of value to a start-up and especially to bootstrapped entrepreneurs. The banker cannot take any personal extra payment, ask for kick-backs, personal stock compensation or warrants for their advice. Most bankers have also worked with dozens or hundreds of other small businesses. There is some great knowledge, recognizable patterns, and experience that bankers have developed over their career that could be helpful. Most bankers also have a strong network that can be utilized by their customer for all different aspects of their business.
The business owner should also know what they want from a banker and communicate that to their banker. Do they want a one-stop shop for all of their personal banking, business banking, wealth management, and services for their employees? Do they just want business banking services? The business owner should find out from the banker how the banker’s department/division is structured and how the reporting and decision making processes within the institution are structured. A customer should want a banker that is trusted and respected in his intuition and community, a banker that has access to the decision makers in the institution and community. Some large banks have call centers located in other states that work with small businesses. Some small businesses don’t want that. The business owner should also provide a business plan to their banker, so the banker can get to know the business, its strategy and growth plans.