Small-business owners tend to stand by their bank.<\/p>\n\n\n\n
For some, that allegiance is due to loyalty: 40% of business owners say their bank appreciates their business, and 30% feel they are treated better than the average customer, according to J.D. Power\u2019s 2021 U.S. Small Business Banking Satisfaction Study.<\/p>\n\n\n\n
In other cases, it\u2019s due to inertia. On average, 14% of small-business owners plan to switch business banks in any given year, but only about 7% actually do so, according to data collected by J.D. Power from 2018 to 2021.<\/p>\n\n\n\n
\u201cThey may complain about their bank, but they just sort of figure \u2018Well, they\u2019re all the same,\u2019\u201d says Carolyn Katz, a business advisor and certified mentor with SCORE, a national volunteer organization that offers free business mentorship.<\/p>\n\n\n\n
Sticking with a business account that doesn\u2019t suit your company can hurt your bottom line. Excessive fees, restrictive limits and insufficient business products can cut into profits and stall business growth. And all are cues that it\u2019s time to shop around for a business bank account.<\/p>\n\n\n\n
When to switch business bank accounts<\/strong><\/p>\n\n\n\n 1. You\u2019re exceeding your limits<\/strong><\/p>\n\n\n\n Exceeding transaction and cash deposit limits is a good sign your business has outgrown its business checking account<\/a>. While it\u2019s tempting to simply upgrade to the next account tier your bank offers, now is a good time to explore your options and compare limits, fees and services at other banks. More on that below.<\/p>\n\n\n\n 2. You\u2019re hit with excessive or surprise fees<\/strong><\/p>\n\n\n\n While some fees are expected, charges for overdrafts, wire transfers and ATM usage vary from one bank to the next.<\/p>\n\n\n\n Some business accounts charge $35 or more for overdrafts, for example, while others charge $25 or less \u2014 and some don\u2019t charge for overdrafts at all. Compare fees at local banks, credit unions and online banks to find a better fit for your business.<\/p>\n\n\n\n 3. You can\u2019t get a business loan<\/strong><\/p>\n\n\n\n If your primary bank turns you down for a business loan<\/a>, explore other options. Smaller banks, credit unions and community development financial institutions often have more flexible lending standards than large banks.<\/p>\n\n\n\n At small banks, for example, 66% of applicants were approved for at least some funding in 2021, compared with 48% of those who sought funding with a large bank, according to the Federal Reserve\u2019s annual Small Business Credit Survey.<\/p>\n\n\n\n Applicants at small banks were also less likely to report challenges with the application process, funding time, interest rates and repayment terms.<\/p>\n\n\n\n 4. You need additional business products<\/strong><\/p>\n\n\n\n At some point, your business may need merchant services, payroll support or a business credit card<\/a>. While your bank may offer these products, it\u2019s smart to research rates, fees and features at other banks and service providers.<\/p>\n\n\n\n A business card with a long 0% intro annual percentage rate period, for example, can help your business finance small purchases and avoid rising interest rates (provided you pay off the purchases before the promotional period ends).<\/p>\n\n\n\n 5. You experience bad customer service<\/strong><\/p>\n\n\n\n No bank is 100% free of issues and errors; the key is how your bank handles them.<\/p>\n\n\n\n Does it take multiple calls, emails or visits to resolve an issue? Do you get conflicting answers to the same question? Do you struggle to even find someone to talk to?<\/p>\n\n\n\n \u201cThe account I closed first when I had my own business was the one where I just could never talk to a human being,\u201d Katz says. \u201cIf I called them, when I walked into my local branch, they couldn\u2019t find my information; they didn\u2019t know what was going on.\u201d<\/p>\n\n\n\n Another red flag is service that doesn\u2019t match your business hours or style. A bank that handles all customer questions via email might work for an e-commerce business, but it\u2019s less than ideal for a truck driver.<\/p>\n\n\n\n How to change business accounts<\/strong><\/p>\n\n\n\n You don\u2019t need to make a clean, swift break from your current business bank, Katz says.<\/p>\n\n\n\n \u201cIt\u2019s not like breaking up with your boyfriend. You don\u2019t have to call it quits all in one day,\u201d Katz says. \u201cTake some money, put it into a new account, start using that more and give the other account some time to age out.\u201d<\/p>\n\n\n\n You can also keep your current account if it works for you in certain ways (but be mindful of potential monthly fees). Maybe your bank offers the most competitive terms on small-business loans, for example, but you open a new account elsewhere to take advantage of a free business checking account<\/a> or a business credit card with stellar rewards. Different banks have different strengths, after all.<\/p>\n\n\n\n If you do opt to switch your main business bank account, use a \u201cswitch kit\u201d to make sure you have everything in order. These checklists offer helpful reminders, like switching recurring payments and notifying your accountant. Several banks offer these kits to ease the transition for new customers, but you can find one online if your chosen bank does not.<\/p>\n\n\n\n More From NerdWallet<\/strong><\/p>\n\n\n\n Kelsey Sheehy writes for NerdWallet. Email: ksheehy@nerdwallet.com. Twitter: @KelseyLSheehy.<\/p>\n\n\n\n The article 5 Signs You Need a New Business Bank originally appeared on NerdWallet.<\/p>\n","protected":false},"excerpt":{"rendered":"Small-business owners tend to stand by their bank. For some, that allegiance is due to loyalty: 40% of business owners say their bank appreciates their business, and 30% feel they are treated better than the average customer, according to J.D. Power\u2019s 2021 U.S. Small Business Banking Satisfaction Study. In other cases, it\u2019s due to inertia. 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