Business Loans

Best Banks for Small Business in 2021

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The first step in separating your personal and professional finances is to set up a business bank account in your company’s name. A separate business identity will streamline your taxes, help establish business credit and protect your family’s assets.

Picking the best bank for your small business gets a little more complicated — the services you need now may not suit your company in the future. Will you simply need a checking account for operations? Are you looking to earn interest? Do you need a loan? Our six best banks for small business all offer zero to low monthly service fees. From there, we broke them into categories depending on the particular services you’re seeking.

Best Banks for Small Business
Bank Monthly Service Fee Min. to
Open
APY Transaction Fees Loans available
BlueVine: Best checking account $0 $0 1.00% up to $100,000 Unlimited payments and transfers, but each cash deposit is $4.95 Yes
Axos Bank: Best online banking $0 $1,000 Not on basic account, up to 0.81% on Business Interest Checking Up to 200 free transactions per month, $0.30 per item thereafter Yes
Consumers Credit Union: Best free checking $0 $5 Not on Freedom checking, 0.05%
on Power and Community checking
Up to 100 free transactions per month, $0.25 per item thereafter Yes
Wells Fargo: Best for loans $10 waived if balance is $500+ each fee period $25 None Up to 100 free transactions per fee period, $0.50 per item thereafter; free cash deposits up to $5,000 per fee period Yes
Lafayette FCU: Best credit union $0 $100 Not on basic account, but 1.00% on commercial checking Up to 200 free transactions per month, $0.15 per check and $0.35 per deposit thereafter Yes
Chase: Best credit card $15 waived if your business meets certain requirements $0 None Unlimited electronic transactions; free cash deposits up to $5,000 per statement period; up to 20 free teller transactions Yes

6 best banks for small business

We looked at hundreds of lenders offering business checking accounts, loans and credit cards to come up with this list of top lenders.

Best business checking account: BlueVine

Pros Cons
  Integrates with online lending platform

  High APY

  No business savings account

  No personal checking or savings

Perhaps best known as an online lender to small businesses, BlueVine launched its business checking account in 2019. While relatively new, the company offers competitive features, notably unlimited transactions and no minimum required balance on an interest-bearing checking account.

However, if you’re looking for physical branches, especially if you run a cash business, you’ll want to bank elsewhere. It’s easy to deposit checks online, but there’s a fee for depositing cash at Green Dot locations. You may withdraw cash without a penalty from one of 38,000+ MoneyPass locations.

Best online business banking: Axos Bank

Pros Cons
  QuickBooks compatible   No branches
  Other small business offerings: savings, CDs, lines of credit, term loans, equipment financing and more   High opening deposit

Axos is another online bank, one that provides three small business banking accounts: Basic Business Checking, Business Interest Checking and Analyzed Business Checking. Through March 31, 2021, new businesses that open an account and maintain a daily average balance of at least $2,500 are eligible for a $100 bonus.

Axos’ basic account requires business owners to open an account with at least $1,000, but you won’t have to pay a monthly service fee and you’ll get 200 free transactions (debits, credits, or deposits). A $100 deposit opens the Business Interest Checking account, which earns interest as the name says, but you’ll pay a monthly fee if your daily balance dips below $5,000 and you only get 50 free transactions.

Best free business checking account: Consumers Credit Union

Pros Cons
  Credit unions tend to have lower rates and fees.   Relatively low number of free transactions
  Other small business offerings: savings accounts, commercial mortgages, secured lines of credit, equipment financing, credit cards and more.   Business services not available everywhere

Credit unions are an alternative to online lenders and traditional banks, but you’ll need to be a member in order to access their services. Consumers Credit Union is open to anyone who pays a $5 fee, but its business accounts are only open to those doing business in Illinois and Wisconsin. You also have to open your account in person at a branch.

Once a member, you can choose from three different small business checking accounts: Freedom Business Checking, Power Business Checking and Community Checking, an account designed for nonprofits.

Community Checking and Freedom Business Checking are free to open and maintain once you pay the membership fee. Power Business Banking carries a monthly service fee if your monthly balance falls below $5,000 but allows businesses to earn interest on their accounts. Community Checking earns the same 0.05% APY, a good choice if you’re starting a nonprofit organization.

Best bank for small business loans: Wells Fargo

Pros Cons
 Business credit cards with rewards   Monthly service fee
  Other small business products: business lines of credit, loans, merchant services, payroll   No interest-bearing checking accounts

If you prefer larger banks with nationwide branches, look no further than Wells Fargo. Wells Fargo offers three small business checking accounts: Initiate, Navigate and Optimize. Each one carries a $25 opening deposit and a service fee, unless you maintain a minimum daily balance, starting at $500. None earn interest, but the Optimize account offers an earning allowance.

Card-free ATM access, plus overdraft protection from a linked savings account and a certain number of free outgoing wire transfers (on the Navigate account) are a few perks you could expect at a large bank like Wells Fargo. But there’s another advantage to setting up a bank account at Wells Fargo — access to its business loans and lines of credit. Banks typically offer lower rates than alternative lenders, but most require that you have an established relationship. Wells Fargo, for example, requires that you have a checking or savings account open for least one year before you can apply for one of its term loans.

Best credit union for small business: Lafayette Federal Credit Union

Pros Cons
  High APY (on commercial checking account)   Membership required
  Other small business products: loans, management services, employee banking services, savings accounts   Fee for electronic deposits

Like Consumers Credit Union, you have to be a member of Lafayette FCU to open an account, but joining is easy: simply pay a one-time $10 fee to the Home Ownership Financial Literacy Council or join through one of Lafayette’s other membership paths.

Once a member, you can open one of two business checking accounts: Basic Business Checking or Business Commercial Checking, which offers an APY of 1.00%, but also requires a minimum opening deposit of $1,000.

Best bank credit card: Chase

Pros Cons
  Ink’s line of credit cards offer bonus points, bonus cash and rewards. Chase also offers co-branded cards with United Airlines and Southwest Airlines.   No interest-bearing checking accounts
  Other small business offerings: merchant services, line of credit and loans, savings accounts   High daily minimum balance needed to avoid maintenance fee

Chase is perhaps best known for its credit card offerings, but it also provides personal and business banking services, though it has just one checking account option for small businesses, Chase Business Complete Checking. Chase Performance Business Checking is for mid-sized companies while Chase Platinum Business Checking is for large businesses. Through Jan. 21, 2021, Chase is offering $300 when you open a Business Complete checking account.

Out of all lenders on this list, Chase has the highest daily minimum balance needed to avoid a monthly fee: $2,000. But you could meet this number in other ways: make at least $2,000 in monthly purchases on your Chase Ink business credit card(s) or deposits through Chase merchant services transactions. You could also waive the fee if you have a Chase Private Client Checking account or if you’re a military veteran or active-duty service member.

How to find the best bank for small business

Choosing your best business bank account takes time. If you’re in a hurry, opening a business bank account where you already have a personal account could be convenient, but you might miss out on perks, savings or services you’ll need later. These steps can help you research the best small business bank account for you.

Determine the fee structure

Some banks charge a monthly service fee that can be waived in certain situations. Others forgo monthly service fees but may penalize users when they exceed a certain number of transactions. Ask to see a complete fee schedule for the account(s) you’re considering.

Ask about introductory offers

Many banks provide an incentive to do business with them. Your decision shouldn’t be based on the introductory offer alone, but it might help if there’s a steep opening deposit or minimum daily balance required. Speak to a representative about the offer and read the fine print.

Research security protocols

Hacking has become common and any bank could be a target. Discuss the security strategy for your account with your banker. Ask about the procedure if there are unauthorized charges. What is the window for reporting fraudulent activities and who should you contact?

Consider your customer service needs

The last thing you want is to enter a banking relationship with one-sided communication. Speak to other business owners about their experiences with customer service at the bank(s) you’re considering. Some banks offer 24/7 access through multiple channels, such as phone, email, chat and apps. Other banks are only available during traditional working hours.

Look for an interest-bearing account

Finding an account that yields interest should be high on your list. This way, your money isn’t sitting idle.

Ask for perks

You want the best bang for your buck. What else can the bank provide you with if you become a business account holder? For example, Axos Bank’s Basic Business Checking account is QuickBooks compatible. Wells Fargo offers accounting integration plus merchant services.

 

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