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3 months ago

Choosing Your Small Business Bank

Assessing your options before choosing a bank is critical for small businesses. With the evolving landscape of banking, especially digitalisation and the shift away from cash, it's essential to evaluate your current banking relationship and explore other options. Our guide can help you assess your bank effectively.

Check Eligibility Criteria

Understand the eligibility criteria for various banks and their products. Some accounts may require a personal current account with the bank, while others may cater only to specific business structures like sole traders or limited companies. Be aware of industries considered high-risk by banks, as some companies may face barriers.

Scope out Branch Locations

Determine whether branch availability is essential for your business operations. With many branches closing in recent years, consider whether local services are crucial to your banking needs. Explore options like traditional high street banks or banks offering services through partnerships with local Post Offices.

Consider business banks introducing personalised account management if you value additional support.

Evaluate Value for Money

Be sure to clearly outline your business requirements before comparing banks. Evaluate the cost of banking services against the level of service provided. Scrutinise whether 'free banking' aligns with your needs and if there are any hidden costs.

Explore Alternative Avenues

Research alternative funding options beyond traditional bank loans. Explore options such as asset finance and invoice finance. The landscape of small business lending has evolved, opening up various avenues beyond conventional loans.

Look into Lending Options

Evaluate your bank's lending options and understand the implications of ‘Director's Guarantees’ for limited companies. Consider alternative funding and assess whether a bank best suits your business.

Read Reviews

Start by researching surveys and reviews that assess banks' performance. Consider factors like recommendations, account management and overall customer satisfaction. Utilise resources such as the Business Banking Quality, Google Reviews, Feefo and Trustpilot to gauge customer experiences.

Summing Up

By evaluating these factors, SMEs can make informed decisions about their business banking and optimise their financial management for long-term success. Regularly reassessing your bank ensures that your finances align with your business’s evolving needs.

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Sam White