This should not be seen as an endorsement of one institution over another. In fact, this should not be seen as an endorsement for any institution at all. What I am offering is some practical advice when starting your business.
When beginning your business, it is important to set up a bank account separate from your personal account. Doing so will allow you the opportunity to maintain the corporate form and not run the risk of commingling the business money with personal money. Practically, it will allow you to track your earnings and losses better than if you did not have a separate account.
Most banks will require at least two documents when opening a bank account: a copy of your articles of incorporation and your EIN. As these are the first things you should obtain when starting your business, this should not be a problem. The bank will have its own forms for you to complete and if you have any employees, the bank may have you complete an authorization form, allowing the employees to act on behalf of your business.
But with so many banking institutions, how do you know which one is right for you? The answer is not simple or easy but below are three tips in choosing the right banking institution.
Does the Bank Offer You Enough Right Now?
In choosing a bank, it is always important to look at your present situation. While you may use a small local bank for all your personal needs, is its business banking something you can use? For example, if you have a company that does international business and you plan on traveling internationally frequently, will your small bank be able to offer you the services you immediately desire? While you may love your small bank, a larger international one might be more practical.
Does the Bank Offer You Enough Going Forward?
When starting a small business, this may be a tough question to answer right off the bat, but it is an important one. Thinking about where your business is as well as where it is going will save you from hassles in the future. While your business is small now, your goal might be to grow and add employees. Does your bank do payroll? Further, how many branches does it have? If you expand your locations, it might be important to you to have a branch nearby your new locations. Lastly, let’s say down the road you are opening a new location and need to obtain a loan; who does the underwriting for your bank and how long will it take to obtain a decision? The answers to these questions may determine whether you can expand your business or not.
Does the Bank Feel Right?
Most importantly, go with your gut. If you are unsure what bank to go with, ask fellow business owners, or even better, meet with a few small business bankers as they will be your primary contact at the bank you choose. How well do you get along with each of them? Do they seem concerned about your business or only gaining your account? While all of them want your business, it is important to choose one that you feel comfortable with so that you can approach him/her should there ever be an issue.
Choosing a financial institution will probably never create a make or break situation for your business. However, by taking the time to research and find the one that’s right for you, you can begin creating a mutually beneficial relationship that will help both businesses continue to succeed and grow.
If you would like to discuss the incorporation of your business or any other start-up issues, please contact Sallen Law, LLC. We will be happy to discuss your Montgomery, Delaware and/or Philadelphia County business.