Why do so many small businesses go to a bank?
Familiarity. Most of us will have been operating a personal bank account for some years before setting up in business.
Ease. The main banks are a familiar sight on many streets. But where are the 3D Printing Banks?
Cost. There are a variety of different types of finance available but only the fastest growing will be able to access large sums of venture capital or other equity finance. In comparison, banks can offer relatively accessible debt finance.
Flexibility. As with personal accounts, there is now a bewildering array of options for small business accounts. You can run your account through the local branch system. Alternatively, you may find it easier to run your account by phone or through the internet. With 3D Printing, the market is worldwide. You need to be able to access your bank from anywhere.
Whatever the reason, the bank is the first stop for most small businesses. Running a business account is vital for most businesses and not just for borrowing money.
You may need to run a business debit or credit card to pay for goods or services. You may wish to take credit card payments for your goods or services, which means that you will need merchant status. Perhaps you want to take advantage of other services on offer, such as insurance, pensions or foreign currency payments if your business is international.
Perhaps you just want a separate account to make your bookkeeping easier.
What is on offer from the bank?
Banks are keen to advise all businesses – including sole traders – to run a business account separate from a personal account. However, many choose not to. Despite having access to a range of extra services and support, charges are likely to be higher than a personal account.
Drawing a cheque on your account will cost money for each transaction and paying in a (non-automated) credit will also cost money
However, business accounts do bring a plethora of add-ons not available to personal account holders.
Banks are keen to highlight the benefit of the relationship manager based at the local branch, givingbusiness owners support in their local community.
Also, many of the banks will offer free use of a business account for some period to entice new businesses.
You could also take advantage of free telephone or internet banking, discounts from certain suppliers or free legal advice. Even if you are operating as a sole trader, you may want to consider a business account for other reasons. Perhaps you will need it in the future if you expand and take on more help or want to borrow to finance expansion.
If you have decided to open a business account, the choice really begins. Think about what you want from the bank. Do you want to be able to pop in and see the bank manager at any time or would you prefer to run the account in your own time by telephone?