Choosing business banking products is a considerably less exciting—yet no less significant—part of starting an internet business than developing new items, constructing an online storefront, and making your first sales.

Even though it’s crucial to know when to open a business bank account, how to obtain a business line of credit, and what to look for in a business banking rewards program, many business owners either completely ignore these issues or base their choices on standards they’d use when selecting personal financial products.

One of the greatest methods to launch your internet business with success is to select the appropriate business banking products and know what to look for. By taking into account your business banking requirements early on, you can free up time to concentrate on what really matters: looking after your customers and expanding your company, rather than spending a lot of time doing administrative work, paying unnecessary fees, and evaluating competing financial products.

We’ll look at a variety of commercial banking products in this article. We’ll take a look at a few of the products you ought to take into account prior to or soon after starting your firm, and we’ll let you know what to look for and what to steer clear of.

Types of business banking products

Business banking goods are financial services and products that are created with the needs of businesses in mind, as their name suggests. These products frequently resemble ones marketed to individuals, but they differ from them in terms of eligibility requirements, interest rates, and other conditions.

Banks that provide these products are known as retail banks to the majority of online retailers. These are different from investment banks, which are frequently much bigger than retail banks and frequently cater to institutional investors like hedge funds and companies that operate in the capital markets.

Common business banking products include the following:

• Business bank accounts
• Credit and debit cards
• Online business banking
• Lines of credit, such as small business loans and equipment financing
• Cash management services
• Payroll services

Businesses differ slightly from one another. Even within the same industry, two businesses could have completely distinct financial requirements. Nevertheless, the majority of internet retailers can profit from some fundamental business banking products—but only under the appropriate circumstances.

Let’s take a look at some of the most common business banking products, the things to look for, and the things to avoid.

Business bank accounts

One of the most important business banking products is a business bank account.

Maintaining complete separation between your personal and corporate finances is the major benefit of opening a business bank account. Although it may seem obvious, many business owners establish their operations without opening a business bank account, only to find out later that it is difficult or even impossible to separate their business’s finances.

Having a single bank account for both personal and commercial operations might also result in issues like higher tax obligations and other difficulties. This could pose a huge legal issue in addition to being a major headache.

Opening a business bank account can also help you give your company more credibility in your own eyes, which is another reason why you should do so. Opening a special account for their business is something many first-time entrepreneurs discover can make their operation “feel” more real, which in turn can increase their resolve and dedication to seeing their endeavour through to success.

What to look for in a business bank account

One of the most crucial considerations when shopping for a business bank account is costs. There are many different types of fees that retail banks impose for business account users, and this can have a significant impact on your company’s finances.

Finding a business account with little or no fees is ideal. Finding a totally free business bank account is unlikely, given the majority of accounts for businesses will charge at least some fees. Some fees might not seem particularly onerous at first, but they can quickly add up if your firm starts to generate more revenue or engage in more transactions.

Some of the most common business bank account fees include:

• ATM fees are levied by banks for each withdrawal of cash from an ATM and for various balance queries. Costs each transaction might range from less than a $1 to $3 or more, which can soon add up.
• Fees for cash deposits: These costs typically represent a portion of any sum deposited over the monthly allotment you chose when starting the account. These charges can run anywhere from less than 1% to as much as 5%, depending on the bank and the amount deposited.
• Monthly costs: This is likely the most significant form of business bank account expenses. The bank will charge you this amount each month just for keeping an open account. A few banks provide business accounts without a monthly fee, but the majority do.
• Transaction costs: Similar to cash deposit fees, transaction fees are charges that banks impose on any transaction that exceeds a predetermined threshold, usually somewhere between 100 and 200 each month. These fees are typically relatively small—just a few cents each transaction—but they can quickly pile up, just like ATM fees.
• Fees for wire transfers: If you intend to allow consumers to pay via wire transfer, your bank may charge fees for these transactions. While most banks charge a flat fee regardless of the amount, these are generally calculated as a percentage of the entire amount transferred.

If you meet specific requirements as an account holder, the majority of retail banks will waive some or all of the aforementioned fees. This frequently entails meeting particular requirements, such as agreeing to deposit a specific sum of money each month or meeting other requirements, as in the instances of the cash deposit and transaction fee mentioned above.

Due to convenience and comfort with the bank, many business owners decide to do their banking through their personal accounts. Even while this is undoubtedly a possibility, if you find a business banking account with advantageous terms at a different bank (or credit union), don’t be hesitant to switch.

Business debit cards

The next business banking product you may need is a business debit card.

When opening a company bank account, choosing a business credit or debit card is crucial because the two products are interconnected. Different account kinds offer various card types, each with their own bonus or loyalty programs, fees, and other conditions. Even while you definitely shouldn’t let the details of a credit or debit card stop you from opening a business account with favourable terms or rewards, it is crucial when weighing your options or contrasting two otherwise identical account products.

And not every business needs a dedicated debit card.

What to look for in business debit cards

As with business bank accounts, fees are among the biggest considerations.

Find a company debit card that doesn’t charge transaction fees if at all possible. Adding transaction fees to debit card transactions on top of maintenance costs adds insult to injury considering that you could have to pay monthly fees just to retain your business bank account.

If your business bank account needs overdraft protection, find out if debit card transactions that go above the agreed-upon withdrawal limit may result in additional charges. Look carefully at the terms of the cards you’re considering because some banks charge for the privilege of securing overdraft payments and fees for card transactions.

Aside from fee structures, security measures are another important factor when choosing a business debit card.

Avoid using credit cards without chip and PIN technology. Although the majority of debit cards include these chips, several banks still provide corporate debit cards without them. Although still not flawless, this approach is a considerable improvement over conventional signature verification in terms of security.

Online business banking

Regardless of what kind of business bank account you choose to open, online banking is a must.

Online banking is more than just convenient for company owners. Additionally, it involves being able to react to changes in the corporate environment rapidly and with confidence.

Even though the majority of retail banks and credit unions provide some level of online banking tools, the quality of these products varies greatly, which can make picking a bank or account even more difficult. Here are a few things to consider while assessing banking products.

What to look for in online business banking

Not all online banking products are created equal, so it’s worth looking closely at the features before making a decision.

The frequency or speed at which a bank’s app updates is one of the most crucial factors to take into account when selecting a business banking app. While some bank applications reflect deposits and withdrawals practically quickly, others may not accurately reflect account activity for up to 24 hours.

You will likely have to rely on user evaluations to judge this element of an online banking software because, regrettably, very few banks will be eager to highlight the fact that their app updates slowly. Before making any judgments, make sure to properly research an app by reading reviews from different sources. User reviews on the Apple App Store and the Google Play Store for Android devices can serve as good starting points, but neither platform is impervious to fake or sponsored user evaluations.

When it comes to the essential features of a business banking app, it’s also beneficial to pick a bank or account that provides more features than just online balance checks.

For instance, using the camera on your mobile device to deposit checks online can save you a ton of time. When you could be taking care of your customers, you shouldn’t have to squander valuable time waiting in line at a bank branch to deliver a clerk a piece of paper. Your business banking experience may also be facilitated by integrations with contactless payment systems like Apple Pay and Google Pay, as well as integrations with any other accounts you may have at the same bank, such as a personal checking account.

The final consideration when selecting a company online banking product is security. Although the security protections built into your mobile device can help keep your account data secure, be sure to also check into other security features, such as specialised two-factor authentication.

Business banking that’s right for you

Since you are the only one who truly understands your company, selecting the best business banking products might be difficult. The fact that most retail banks frequently have a financial incentive to make the specifics of their business banking products as obscure as possible only serves to muddle matters further.

Make sure to list the features and services you require to look after your consumers before making any judgments. Consider your goals and how you want to run—and grow—your firm when evaluating business banking solutions. What one business considers vital may be an unneeded luxury to another.