What to Know About Business Banking When Starting a Company
You're ready to launch your new business, but you need a financial partner—a bank you trust with the resources and expertise to meet your needs. But what is business banking, and why is it important for your company?
Establishing a business bank account creates a gateway to broader financial capabilities. It's helpful to learn what business banking includes and what to look for in a bank that will hopefully become your partner for years to come.
What is business banking?
Business banking refers to a suite of services offered by most banks that cater to the needs of their business-owning clientele.
The most fundamental level of business banking is opening a business checking account. This is useful for making and receiving payments and simplifies tracking your company's cash flow. You'll also receive a debit card to use for purchases to streamline your spending further.
In addition to business checking accounts, many banks offer a wide array of business-related services, including:
- Business savings accounts
- Cash management solutions
- Loans and leasing
- Business insurance
All these services work together to give you a collection of tools to manage your business's finances and cash flow.
Why it's important
Now that you know about the different types of business-related services that a bank might offer, it's important to know why separate business bank accounts bring value.
By starting your first account, you're opening the door to a more robust financial relationship. Not only will you take the step that separates your personal and business finances, but you'll also start a relationship with a bank that can help you achieve different goals as your company grows. Whether you need a loan for opening a second location or a credit card to help finance expenses, your banking partner can provide a one-stop-shop for your business's monetary needs.
Banks design their business offerings with specific features that owners will value. Here are some examples of how specific products can help you grow your company.
- Hiring employees: Your bank can set up payroll to keep you compliant with regulations and pay your talent for their hard work.
- Giving customers an easy way to pay you: Business banking can help you get set up to accept payment by credit card and ACH.
- Lowering fraud risk: Banks offer various features to help protect you from fraudulent check, debit and credit card transactions.
- Consolidating cash management tools: You can often find custom dashboards and features to better see and manage your cash, including accounts payable, accounts receivable services and automatic check reconciliation.
Finding the right bank
Each business has its own unique needs, so the best bank for each business will vary. However, a great place to start your search is with the same bank you use for personal accounts.
If your bank doesn't offer business banking, or you'd like to explore additional options, start in your backyard for a local business bank. You can even ask fellow business owners where they bank and what they like about those institutions.
When comparing your options, consider the following:
- The bank's track record and how long it's been open
- The services they offer compared to the services you need now and in the near future
- Their experiences working with businesses in your industry and the value that their product options offer
- Whether a business banker will be assigned to your account as a point of contact to answer questions throughout the relationship
It also pays to stop by a branch and have an in-person meeting with a business banker. These meetings can help reveal capabilities that the bank's website might not cover and other strategies they can offer specific to your line of work.
Whichever bank you choose, you should always feel like you're gaining a strategic partner, not just opening an account. Running and growing a business is challenging enough. Starting with the right business bank can help you feel confident that your finances are in good hands, offering a reliable point of contact that can help you explore your options and fund your goals in the years to come.
Financial insights for your business
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.