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New small business bank recommendation

blk 110 132 November 2, 2015 at 11:00 AM in Finance (2)
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Hi, my wife is venturing into the catering business. We are looking for a recommendation for a bank that caters well to small business start ups. We will not be borrowing any money. Just connecting a Paypal business account and credit card reader .We are just looking for an extra 15-25K in income with this business Free checking would be helpful as well. Thank you.


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#2
For business accounts, I have found Cap One offers a decent setup. Free checking with various options and account mins and they usually have an offer for 1+% interest business savings and\or a $250 business checking account opening bonus after you make a bill pay or something along those lines. The offers change month to month though. They have credit card processing and credit cards with decent cashback offers\sign up bonuses\0% interest periods as well depending on what your needs are.

Depending on what your cash flow is like, the 1%+ business savings in combo with the checking account can be useful to squeeze some extra earnings out of your cash. Simply move money back and forth between the two accounts online as needed. I would advise buying the checks from another party though as they typically will gouge you on printed check costs.
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#3
Given the seasonality of catering business and resultant cash flow, I would simply look for a Business DDA that offers the lowest minimum balance requirement or, as you stated, free. Since you won't be needing cash management services (e.g. ACH, wire capability, positive pay, etc), any old checking account will do.

One question: do you plan to incorporate your business? If not, there is no harm in opening a separate personal DDA that segregates your wife's business earnings. This will also give you access to a lot more options, take advantage of relationship benefits for combined balances and, eventually, earn interest. Remember - business DDAs are not allowed to earn interest.


Hope this helps and best wishes to your wife's success!
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#4
Congratulations to your wife. Entrepreneurship is the foundation and backbone of our capitalist economy.

As for what banks are best for small businesses, it might not be a bank at all, but rather a credit union. See which credit unions in your area she's eligible for, then see which of those offer business accounts. Credit unions are often limited as to how much "business" business they can do, but some do offer business accounts. She might find one that used to offer business accounts, but has reached their max and can't offer any more at the time.

If she strikes out with credit unions, she should look next to small, local banks - five or less branches. She should go in, meet with the president (yes, the president) and tell them what she's looking for. Once she meets with a few from a number of banks she'll begin to get a feel for which banks fit best with her business.

She should avoid big banks. They simply do not care about small businesses. They're only really interested in mid- to large-size businesses. She will get much better customer service from a credit union or small, local bank. Stick to those credit unions and small banks that welcome and want her business.

Her business very well might take off and its needs might be different down the road. It's important for her to have a credit union or small bank that her business can grow into, that will be there for her business, and wants to see her business grow.

As a side note, she should also avoid business credit cards. They are still tied to her personally and not her business and they rely on her credit score. And, business credit cards to not enjoy the same protections under federal law that do personal credit cards. So, she should, instead, get a separate personal credit card that she uses only for business-related purchases.
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Last edited by Brian1 November 3, 2015 at 08:01 AM
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#5
Thank you everyone for all your input!
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#6
If in metro Atlanta (Not sure if DCCU serves outside of Atl) - Delta Community Credit Union business checking is free and low fees.
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#7
It makes me happy when SD actualacts as the community it started as (as opposed to juvenile bickering overdeals), but I have to disagree with *a lot* of this post.

To be clear: I don'tdisagree with Credit Unions being a good option - they absolutely can be.However, you are doing yourself a disservice if you automatically avoid"big banks" because they are "evil."

Quote from Brian1 View Post :
She should avoid big banks. They simply do not care about small businesses.They're only really interested in mid- to large-size businesses. She will getmuch better customer service from a credit union or small, local bank. Stick tothose credit unions and small banks that welcome and want her business.


OP, in the end, thequestion is "what do you want out of your banking relationship?" If it is justa repository for funds with occasional promotional bonuses thrown in, big bankscan out-punch community ones almost every time. If you want personal attentionand tellers who know your name, then yes community banks and Credit Unions area better option. But if you want to grow with cash flow advice,payables/receivables management, online banking capabilities and relationshippricing, I would argue that big bank may be a better option still.


Quote from Brian1 View Post :
Asa side note, she should also avoid business credit cards. They are still tiedto her personally and not her business and they rely on her credit score. And,business credit cards to not enjoy the same protections under federal law thatdo personal credit cards. So, she should, instead, get a separate personalcredit card that she uses only for business-related purchases.


This final comment onavoiding business credit cards is the one I disagree with most. Business creditcards offer some of the most lucrative sign-on bonuses and ongoing discountscompared to consumer cards. Yes, you give up some consumer protection as Brian1mentions, but I can't think of a scenario where a small business owner (evenSole Prop) is better off with a consumer card.

In addition, outstandingbalances on SOME business credit cards are NOT counted in your total personaloutstanding balances. This is huge in a seasonal business like catering withirregular cash flow. Does she need to buy $20,000 in food and serving suppliesbefore holiday season and vendor does not offer Net 60 terms? Put it on the(right) business card, the $20,000 balance will never hit your personal creditreport and pay off with her receivables when they roll in. Check before yousign up, but our Chase Ink Plus card does NOT report balances in our personaloutstandings - I believe AmEx does, but would need to verify.
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#8
My Amex business delta card does NOT report to my personal credit
My 5/3 MasterCard Business does NOT report to my personal credit

I have read Capital One did it to people that were using it for personal use more than business.

I get my US Bank business accounts free (basic) I have to pay .12 per $100 in cash deposits over the first $2600 in cash deposits
My 5/3 is up to $5000 without a charge. I'm not sure what they charge.
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Last edited by stufine November 9, 2015 at 10:48 AM
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#9
Quote from megakimcheelove View Post :
However, you are doing yourself a disservice if you automatically avoid"big banks" because they are "evil."
It's not because big banks are "evil" (I don't think anyone here said that). It's because they rank at the very bottom of virtually every credible customer service survey or index - far behind smaller banks and credit unions.

Quote from megakimcheelove View Post :
Yes, you give up some consumer protection as Brian1mentions, but I can't think of a scenario where a small business owner (evenSole Prop) is better off with a consumer card.
If someone steals a business credit card number, under the law the owner of that card can be held for all of the money charged to that card. Conversely, if someone steals a consumer credit card number, under the law the owner of that card exposure is capped at $50.
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