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Small business owners often do not have the capital on-hand to completely finance their projects by themselves, which is why many small business owners choose to get help through a local bank. Cultivating a healthy relationship with your bank is an important part of small business financing. After all, both sides of the interaction have money on the line, so you want to make sure you have a trusted partner in your bank of choice – one that you can hopefully work with for years to come.
To that end, we put together this list of five questions that every small business owner should ask their bank. These basic questions will help you discover if your chosen bank is a good match for your company and specific small business financing needs.
1. What Services Do You Offer?
The first thing you should ask is what kind of services the bank offers. Many banks are able to offer businesses more than just typical accounts and loans, with services like payroll, retirement accounts for employees, credit lines, and more becoming the standard.
Important services you should look for include:
- Business checking accounts
- Business investment accounts
- Business credit cards
- Lines of credit
- Merchant services
- Grant and government funding opportunities
- Financial advising
Another important thing to look for is whether they offer their services on a convenient, accessible platform. These days, you don’t want to have to call your bank every time you need something, which is why a sleek online or mobile banking platform that offers all of your services on the fly is a necessity.
2. Do You Offer SBA Loans?
You should also ask specifically about SBA loans. SBA loans are offered through banks partnered with the federal government. These kinds of loans are a great option for small businesses thanks to their low interest rates and a 75% loan guarantee. If you need a business loan you should consider SBA loans, just remember that not all banks are going to be able to offer this.
3. What Kind of Fees Do You Charge?
Some banks charge sneaky fees that aren’t always obvious, though you definitely don’t want to be on the receiving end of any of these charges. Be sure that the bank you choose to work with is transparent about any fees or charges that you may end up being responsible for, as you don’t want to pay for services that you don’t actually need.
Ideally, you should get fee details in written form. Make sure that you read the fine print on any agreements that you sign. The last thing you want is to have a series of hidden fees you weren’t aware of. Common fees that are relevant for business accounts include monthly maintenance fees or excessive transaction fees.
4. Have You Worked With Other Clients in the Industry?
All industries have unique problems and strategies for overcoming those problems. That’s why it is helpful if your bank has worked with another business similar to yours in the past. They can bring that experience to the table to offer a different perspective thanks to having worked within your industry before.
If a bank has worked with businesses like yours in the past, try to see if they offer financial consulting services. Through financial consulting services, you can get the help of an experienced professional to assist you with planning the future financial direction of your business.
5. Can You Grow With Me?
Most small businesses may start with only one or two employees, but they can then quickly branch out as they begin to grow. As your business expands, you need to make sure that you have a bank that can handle that growth. It’s important to figure out if your bank can grow with you. For example, you may want to buy property eventually instead of lease, so you may want to see if they offer commercial property loans for when you take that next step.
Conclusions
Small businesses and banks are both important parts of the economy and often rely on one another. If you own a small business, make sure that your relationship with your bank is solid. Finding the right bank to work with can mean the difference between successful growth and business difficulties. When it comes to banks for small businesses, their experience is just as important as yours.
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