Monday, June 22, 2009

Banking Services Defined

When you start a small business, it is important to set up a separate bank account to separate your personal and business funds as much as possible. In fact if you have established a LLC or corporation of some type, you will need to establish a bank account for that entity. If not you could very well lose the benefits of the liability protection.

Business and personal banking services are quite different in pricing and capabilities and needs. We are all familiar with personal banking services, but what distinguished business banking services from personal?

Most of us have personal bank accounts, normally in multiple forms. We have our checking accounts that we pay our bills with, savings accounts, CD’s and normally a credit and debit card. The fees associated for maintaining those bank accounts are normally non-existent or waived for direct deposit or minimum balances.


Corporate banking is what I dealt with at several companies. Corporate banking is actually what makes banking in the USA, so much better than just about any other countries banking system. Connectivity and infrastructure that personal accounts use were originally built for corporate transactions.
The thing to distinguish the two is charges. There is nothing free in corporate banking. I joke that just thinking about your account, the bank charges you. But of course the number of services you receive is much more extensive.

Small Business Banking

Small business banking is normally a combination of the two. It has many of the features of a corporate account, such as multiple names associated with it, but normally do not charge you if you stay under particular transaction numbers or maintain particular deposits.

What do I need right now?

I just need a simple bank account to collect payments, make a few purchases and file tax information. I do not need, at this time, positive pay given the small amount of checks I would write. I don’t need lockbox services yet. Would be great if I did. I do need some type of merchant account, whether through a bank or PayPal. I would like a debit card with reward points if possible. I think given the small amount of transactions, the costs should be minimal for an initial account.

I am going to see a couple banks this week and figure out what they can offer me if anything. I will let you know how it goes.



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