There are a lot of things that need to be considered when opening a new company, some more important than others.Choosing a bank that will fit with your company’s needs, culture and future aspirations is definitely one of the more important ones. Banks often play a very important role in a startup’s initial period, so it makes sense to put some thought into what bank will provide the best solutions and services to your company. While the bank where you hold personal accounts might be par excellence in the personal banking segment, this might not hold true for business banking, so you should not rely on that aspect alone. So what are the things you should take into consideration before making a decision?
Where to Start?
The single most important criterion you should have in mind when shopping around for a bank are needs of the company. Remember, you are trying to find a bank that specializes in what your company needs most. So before you even start looking for a bank ask yourself what your company’s needs actually are – it’s rather difficult to find a match if you don’t know what you are looking for!
You aren’t only selecting a bank for the present, but also for the future. Startups are usually very dynamic and can grow very quickly, developing banking needs that didn’t exist a couple of months back. And because you don’t want to be moving from bank to bank, looking like you’re chasing your own tail, you should really consider what needs your startup might develop in the foreseeable future before making a final decision.If your only need right now is online banking services, for example, consider whether the company might need a more personal approach that includes a personal financial advisor in the future.
This isn’t the only important criteria, of course. Banks are institutions that make money in different ways. One of those ways is charging fees to their beloved customers – businesses and individuals alike. While banking regulations provide a lot of restrictions and limitations, making banks look very generic, the fees they charge actually differ, sometimes by a substantial margin. Pay attention to even the smallest differences in fees as the total amount can really pile up, and you don’t want to be spending scarce resources on deposit fees and other ridiculous charges banks come up with. Additionally, always look at the fine print unless you want to be unpleasantly surprised by some hidden fee your friendly banker forgot to tell you about.
So, how to get started on this rather time-consuming task? The easiest way will be to compile a list of banks and compare their features and fees head-to-head. See which banks specialize in what you need most and narrow down your list. The features you will want to consider include international requirements (whether you need to be physically present to open an account, for example), wire transfers, payroll services, card services, online/offline banking, business loans and provision of financial information, just to name a few. After you have narrowed down your list, see which bank will provide you with the best services for the lowest fees – that is most probably the bank you are looking for.
This is all nice and easy (yeah right), but you might also be wondering whether to look at large multinational banks or focus more on the smaller local banks. The truth is there is no single answer to this question. While research show that smaller banks are more likely to give loans to startups and smaller companies, larger banks will most probably be able to offer better interest rates. A lot of entrepreneurs are also of the opinion that smaller banks offer a more personal approach and are thus more favorable with startups. This is not to say that larger banks are no good for startups. To the contrary, a larger bank might sometimes provide you with services that smaller banks cannot afford to offer. The bottom line is that you always need to consider your own company’s situation – don’t rely on generic reviews, because what worked for others might not work for you.
Take a Look Around
As your company develops from a startup into a mature business, it doesn’t hurt to shop around for a new bank periodically. Banks might change their offerings and another bank may become more appropriate for your company sometime in the future. It never hurts to stay updated.
A Starting Point
To give you a rough starting point, we checked out some of the banks in Singapore. After snooping around for a bit, we found that the three most popular startup bank accounts are OCBC’s Business Entrepreneur, DBS’s Entrepreneur’s Account for Start-Ups and Standard Chartered’sBusinessOne. If you are currently searching for a bank for your startup, this is probably a good place to start looking. The comparison table below will give you an idea of what each of the mentioned business accounts offer.
All information in this article was source by iMoney Singapore without any direct contact or fact verification with the banks mentioned.
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