2016-09-24

If you're starting a small business, it's crucial that you find the right bank for your loan needs. Whether you're shopping for basic services or want all the bells and whistles, you have plenty of options.

How to Choose the Best Bank for Your Small Business

The first step in choosing the best small business bank for your venture is figuring out what services you need. To find out if your banker has lending authority, ask him what the biggest loan he can approve without sign-off from a manager is; community bank managers often favor small businesses, and they typically enjoy a lot of discretion when it comes to lending. And because community banks are often more customer-friendly, they usually offer personalized service and flexibility -- like covering overdrafts without exorbitant fees -- and sometimes put more weight on a borrower's character than a credit score.

Try to choose a bank that works with the U.S. Small Business Administration, or SBA, because it will be more likely to lend you money due to the fact that the loans are federally subsidized. On the other hand, big banks have tougher lending restrictions, but can afford to offer services like accounting and payroll assistance for small business owners. Whether you go with a small, local bank, an internet bank, a credit union or a big bank, weigh your options carefully.

Whatever type of small business bank you choose, think of your interactions with the institution as a relationship that will last a long time, so look for a banker who understands not only your industry, but also your individual banking needs. Here are the best banks for small businesses.

Read: 15 Best Free Business Checking Accounts


Best for Holistic Lending: Bank of America

Line of credit: From $10,000 up
Loan offerings: Secured loans starting at $25,000
Fees: $150 fee for lines of credit up to $100,000; $150 renewal fee for lines of credit up to $100,000; 0.5 percent of amount financed for loans

Bank of America offers a host of services for small business banking, including online payroll services, remote deposits and cash management services at competitive rates. In addition, Bank of America is a preferred SBA lender. When determining whether to give you a loan, Bank of America will take the whole picture of your business into account, which makes it a great bank for holistic lending.

When it comes to collateral, Bank of America can either put a lien on your assets or you can take out a certificate of deposit and get up to 100 percent of that amount. For secured loans, you can get your money in a lump sum and pay it back via an auto-debit program.

You can access customer service in person or via online chat, phone or email. The downside of a Bank of America small business loan is that you are required to be in business for a minimum of two years, be a key stakeholder and accept personal responsibility for the loan.


Best for Payroll Solutions: BMO Harris

Line of credit: $10,000 to $500,000
Loan offerings: $10,000 to $500,000
Fees: $250 closing fees for both lines of credit and loans

BMO Harris can help small business owners manage finances by providing accounts receivables and payables management, easy payroll processing and merchant services. Other pluses include a simplified process that tracks every payment the business makes, an efficient method for receiving payments that includes online remote deposits and a promise that if it can't meet or beat your current merchant processing rate, it will give you a $500 gift card.

If you're looking to spend more time on building your business than processing payroll, BMO Harris can take care of that for you, too, with one of two options: the Paychex payroll solution, which includes a live, dedicated support person; or the Business Online Payroll solution, which is an easy, online system that calculates your payroll taxes.

You can access BMO Harris' customer service via phone or online contact form and in person.

Read: Corporate vs. Business Credit Cards: Which Is Best for Your Bottom Line?

Best for Employee Benefits: Citizens Bank

Line of credit: Varies by region
Loan offerings: Up to $500,000
Fees: $150 annual fee for line of credit from $50,000 to $100,000; 0.3 percent for line of credit $100,001 to $1 million

Citizens Bank offers entrepreneurs business support in the form of merchant services, cash management and employee benefits, among other features. You can perform a wide variety of banking tasks with Citizens' online services, such as paying bills, handling expenses and depositing money.

Merchant services include online and POS terminals, a top-notch payment processor, and credit and debiting processing. Citizens' comprehensive cash management services include collection and payroll services, disbursements, international banking services, information reporting, remote deposits and more.

Your employees can also enjoy a range of banking benefits that includes retirement planning and investment advice. You can access Citizens Bank's customer service via phone or email and in person.

Best for Security: SunTrust Bank

Line of credit: Up to $250,000
Loan offerings: Maximums of $250,000 to $5 million or $10 million
Fees: Upfront fees for loans vary

SunTrust Bank can manage your company's receivables, simplify your payments and help optimize your cash flow. The electronic receivables include online bill pay and direct deposit in addition to ACH pre-authorized debit.

SunTrust Bank's cash vault services are designed to keep your money secure -- the bank partners with Brink's Inc. to have an armored guard deliver your cash to a secure vault. Other security features include information tracking so you know what's happening with each transaction and 24/7 access to an automated ordering system that enables you to place coin and cash orders at any time.

If you're in need of help with cash-flow management, SunTrust Bank offers a selection of solutions that include different business checking and savings accounts, online business banking tools, account protection and global cash flow. You can access SunTrust Bank's customer service in person and via phone, email and online chat.

Read: What Are the Best 401k Providers for Small Businesses?

Best for Large Loans: U.S. Bank

Line of credit: Up to $250,000, $500,000 or $2 million
Loan offerings: $250,000 to $11.25 million
Fees: $150 upfront; $50 per year for lines of credit

U.S. Bank can help you run your small business by providing a payroll service, direct payroll deposit, payroll card, workplace banking and employee insurance. You can deposit checks online or on your mobile device as well as choose from credit cards that provide cash and points rewards, travel awards or retail awards. You can also get an accurate overview of your business by using U.S. Bank's secure Viewpost network, which enables you to see transactions in real time.

The network also offers free invoicing, streamlined payment management, secure electronic payments and lower costs when you use electronic checks; you receivables won't cost you a dime and payments won't cost as much as it would to print and send them. You can access customer service in person and via phone, email and online chat.

Best for Unsecured Loans: Wells Fargo

Line of credit: $5,000 to $100,000
Loan offerings: Up to $6.5 million
Fees: 3 percent for loans of $150,001 to $750,000; 3.5 percent for loans of $750,001 to $5 million; $150 opening fee for line of credit; $150 annual fee for line of credit, beginning second year

Standouts for Wells Fargo in the arena of small business loans include business payroll services, international business services and retirement investment planning.

If you're choosing a bank for your small business and you're looking for an unsecured line of credit, Wells Fargo can help; it offers interest rates that are usually lower than credit card rates and it sets credit limits according to credit history and income, among other criteria.

The available revolving lines of credits can make managing your cash flow a lot easier and you can utilize the Wells Fargo Works for Small Business program to access a plethora of videos, expert tips and articles to help you expand and boost that bottom line. Customer service is available in person and via phone and email.

This article originally appeared on GOBankingRates.com: 6 Banks That Make Starting a Small Business Easier

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