One of the most significant changes you must make when starting or operating a small business is adopting business banking instead of conventional banking. Business banking is a specialized type of banking that offers services and features specifically aimed at small businesses. This account can help you manage your finances more effectively, save money, and improve your business operations.
In addition to traditional deposit accounts and loans, many banks offer special services such as cash management, credit card processing, and merchant services for small businesses. Here are seven reasons to consider business banking if you’re still on edge about switching to business banking.
1. You Can Earn More Interest
Interest rates on online business banking products are often higher than those conventional banks offer. This is because business accounts are aimed at a different target market – businesses that need to grow their cash flow. The higher interest rates help encourage businesses to keep more money in their account, which can eventually be used to reinvest back into the business or for other purposes.
2. You Get More Flexibility
Business banking products offer more flexibility than traditional banking products. As a result, you can tailor your account to suit your specific needs better. For example, many business accounts offer overdraft protection, giving you peace of mind in an emergency. Other accounts may provide special features, such as rewards programs, which can help you save money on everyday purchases.
3. You Can Build Better Credit
The creditworthiness of your business is important for many reasons. A good credit score will give you better terms and rates if you want to get a business loan. A good credit score can also help you get approved for lines of credit and other financing products. Business banking can help you build better credit for your business by offering products that report to business credit agencies instead of personal credit agencies. This can help improve your chances of getting approved for future financing.
4. You Can Access More Services
Business banks offer a wide range of services that can benefit small businesses. For example, many banks provide cash management services to help you manage your cash flow. These services include direct deposit, automated clearinghouse (ACH) payments, and wire transfers. Cash management services can help you reduce accounting and administrative costs and save time.
5. You Can Get Rewards
Many business banking products offer rewards programs to save money on everyday purchases. For example, some business credit cards offer cash back or points that can be redeemed for merchandise, travel, or gift cards. Rewards programs can help you stretch your budget by giving you discounts on the things you need to purchase for your business.
6. You Can Save On Fees
Business banking products often have lower fees than traditional banking products. For example, many business checking accounts have no monthly maintenance fees. This can save you significant money over time, especially if you keep a large balance in your account. In addition, other standard expenses, such as ATM fees, may also be lower with business banking products.
7. You Can Get Specialized Advice
When you work with a business bank, you’ll have access to specialized advice and support from bankers who understand the unique needs of small businesses. This can be extremely helpful when you’re trying to grow your business or make important financial decisions. For example, you can get advice on cash flow management, borrowing money, and choosing the right insurance for your business.
Business banking can offer many benefits for small businesses. If you’re looking for a way to save money, earn more interest, or get specialized advice, business banking may be right. Talk to your banker about business banking products and services that can help you reach your goals.