Recommendations for Business Bank Account

[Michael in ABQ]

I've transitioned a side business from a sole proprietorship to an LLC and I'm looking to move from a personal bank account I use exclusively for the business to a business account registered to the LLC.

I am not a fan of the large banks and have generally only used credit unions.

Does anyone have any recommendations for a bank for a business checking account - or warnings against a particular bank?

I typically receive 2-3 deposits per month and I then distribute them to several sub-accounts for things like inventory, payroll, taxes, and operating expenses. I've called a couple of local banks and some do not have this capability to do sub-accounts. They would require me to open multiple accounts each with it's own fee - or minimum balance to waive that fee.


Eventually I hope to get a line of credit with whichever bank I use and so I want to start building that relationship now.

[Rubic]

Your post indicates that you prefer smaller banks, but I had a good experience with Bank of America.  We established an LOC there -- which made covering payroll less stressful for a while, though we eventually closed it about a year later.

[Queen Frugal]

I am a big fan of local banks.

FWIW, I use YNAB for my LLC business - instead of QB or other accounting programs. I just have a separate budget set up for it. YNAB is great at filling buckets to pay for given items and it does a decent job of tracking actual expenses if you download the expense reports. You can have separate buckets for payroll, taxes, or whatever you want. Then you can just use one bank account. Or multiple bank accounts. Whatever. It's way more nimble than having separate bank accounts or sub accounts.

Here is more detail about how YNAB can be used to track your business:
https://www.youneedabudget.com/calling-all-freelancers-and-small-business-owners-heres-a-simple-way-to-make-sure-you-get-paid/

[KarefulKactus15]

I currently use a local bank.  But they aren't immune from the same annoyances as the big guys.

If I had it to do over again I'd go to the 5 local banks around my business (big or small) or in my business area and pick the one with the most attractive tellers and best customer service.

[Proud Foot]

When you contact banks ask for their treasury management department. I don't know a way to get out of having fees associated with each account but a treasury management department should be able to assist you in the best set up for what you need. A local bank may not be large enough to offer this so you are wanting to avoid the large banks you could look for a regional bank.

Similar to what Kroaler said, go to several local branches to get information from them about their accounts as well as meet the tellers, branch managers, and customer service representatives. Compare the specific account costs and capabilities but then also weigh the customer service in your decision making. Don't save 0.05% on fees if you will get horrible service.

[Michael in ABQ]

When you contact banks ask for their treasury management department. I don't know a way to get out of having fees associated with each account but a treasury management department should be able to assist you in the best set up for what you need. A local bank may not be large enough to offer this so you are wanting to avoid the large banks you could look for a regional bank.

Similar to what Kroaler said, go to several local branches to get information from them about their accounts as well as meet the tellers, branch managers, and customer service representatives. Compare the specific account costs and capabilities but then also weigh the customer service in your decision making. Don't save 0.05% on fees if you will get horrible service.

I ended up going with a local community bank that has a pretty substantial business focus. There was a local credit union that does a lot of business lending as well but they are completely closed down due to COVID and wouldn't budge on signing documents in person. The bank I went with was also closed to the public but would still make an appointment for me to come in an sign the stack of documents I needed to open a checking account, savings account, and business credit card. They waived any fees for the first 3 months and it's only $5/month if I drop below a balance of $1,500 which I'm not too concerned about. 

I'm pretty happy with my decision as my new banker has years of experience and actually remembered my name from some commercial appraisal work I had done for them a few years ago in a previous job. She's supportive of me opening a line of credit once I grow a little larger. She said they typically offer lines of credit around 10% of annual revenue, but I'm too small at the moment for that to make much sense. It would be like trying to get a $15,000 mortgage, just not worth it for the bank.

[leighb]

I'm currently very frustrated with US Bank. I chose them due to their location in the state I do business and the state in which I live. I've worked with them for 7 years.  But now they are charging fees for any cash deposits over $2500 in a month. I hate fees. So I'm switching to Key bank. 

[Michael in ABQ]

One downside I've found with the community bank vs. my old credit union is there online interface isn't as nice and easy to use. I have to login to a separate site for my business credit card account. Before they had both been on the same screen and I could transfer money from one account to my credit card and see it reflected immediately.