Startup founders look for banks that are steadfast and dedicated to serving their businesses. Finding the one that suits your specific business can be trickier than it seems, as you have to really pick apart what current needs and future demands are most important for your company.
The realistic approach to finding the perfect bank is adjusting your potential costs to meet pragmatic challenges that you can anticipate; having a bank that can do this is essential for the growth of your business.
For the financial greenhorn, every bank can look identical, but they’re not. Here are some key factors to figuring out the perfect bank to launch your startup toward success:
Purpose & Necessity
Before you journey into the world of banking, you need a compass to guide you through the search. First, realize your incentive behind searching for a bank: loans, credit establishment, financial aid, etc. No matter what you’re looking for, it is vital to have it pinpointed from the start. Begin with your financial advisor; if you don’t have one, it’s in your best interest to look for a bank that can provide you with those services.
If you do have an advisor, be sure that they collect your financial information so that you have a coherent overview and can create a strategy for your bank search. You have to create a connection between your long-term monetary projections and the ideal banking setup for your business — for a startup, the priority should be to set up a small account to manage current client payments. However, the case for most early-stage businesses is that, with growth, they will need more than just a checking account. Therefore, you should prepare for the higher-income projections that will require you to have a bigger banking plan in mind.
This directly relates to purpose, but speaks more directly to the ideal match for what you need offered for your local and exponential costs. Planning to grow your business out of the country? Look for a bank that can provide International connections and service that is reliable and still ties into your local setup. Online banking is a service that is growing exponentially for international services, while remaining on a simplistic basis.
For the user who feels that his or her banking needs require access to web-banking and account monitoring, a nationwide service that provides online features is the perfect fit. Be mindful, however, of any online service fees that may exist within these banks.
The company that is looking to invest in image and face-to-face operations should look for banks that have a large ATM matrix and can utilize representative services at a higher rate than other banks. It all comes down to what specific services you want to spend your money on — whether it’s better online services, state-of-the-art facilities, or consistent counseling and data recollection, keep your expense priorities in mind.
Lending & Borrowing Potential
Establishing that your potential lending needs will increase with your company’s growth is nothing short of preventive. Your bank has to trust in your business to give you a credit line that you can work with — it’s becoming harder to find banks that believe in startups.
Community banking has always had the appeal for local business growth, so if a big bank is willing to lend you money, but that money comes with a higher interest rate, your debt might outweigh the current loan. Small banks are more likely to lend at a lower interest rate. However, this can affect a company that is all about public image — association with a nation-wide, heavyweight bank can attract more international and corporate investment in your company.
Choosing a bank for your business is nothing short of complex, as the financial pieces that comprise your company are always changing. The startups that thrive are those that have clear and laid out financial plans — they can adjust to the projected demands of the future. In the commercial world, your business will face hurdles between starting and succeeding, but finding a bank that has your back will make all the difference.