How a small business owner should choose a bank or financial institution.

• Many business owners don’t thoroughly consider their needs when selecting a financial institution. Although there are laws and regulations that govern the activities of banks, savings and loans, credit unions and investment firms, not all financial institutions are the same.

Each institution establishes its own policies for:

• Types of products and services that are offered,
• Criteria for qualifying for a loan,
• Minimum balances for accounts
• Interest rates and charges for account services.

While one bank may specialize in home loans, or auto loans another may focus on commercial loans for businesses. Some banks may only offer basic deposit accounts while others have lock box services, sweep accounts, and even online banking.  It is important to evaluate your business needs before you select your banker. Consider some of the things your banker will help you with. Can your ideal bank;

¥  Assist you with the cash management needs of your business.

¥  Offer investment products of varying maturities – overnight to long-term certificates of deposit.

¥  Offer investment products of varying risks (and thus returns).

¥  Provide advice about qualifying for the loan that best meets your needs.

¥  Provide special loan programs for small businesses, including government-guaranteed loans.

¥  Assist you with finding financial information on your industry.

¥  Select an institution that you can work with as your business grows.

¥  Approach the decision as a long-term investment.

¥  Ask your accountant or lawyer to introduce you to bankers who they are familiar with.

¥  Check with your the chamber of commerce to find out which banks are active in your industry.

¥   Attend their meetings or other service organizations to meet bankers who are involved and have interests similar to your own.

¥  Look for a complementary personality – someone you can relate to and are comfortable with.

Finally, choose a bank whose customer service team can build a trusting working relationship with your firm, and hold regular update meetings to discuss your business and its future banking requirements.