One
you have your Fictitious
Business Name filing done, you'll want to open a
bank account. Choosing a bank is a rather personal
decision, often based on past personal experiences.
Most of the larger banks have account programs for
businesses of all sizes and setting up new accounts is
pretty painless and quick.
You'll want to check out
both small community banks as well as larger regional
banks. Both will have benefits and drawbacks that
you will need to consider for your specific banking
needs.
Features to look
for/compare when choosing your bank:
* Low
monthly/transaction fees; Do they waive fees if a
certain balance is carried? How much are overdraft fees?
Do they charge extra to come into the branch?
* Do they have small
business advisors/loan agents on staff; You'll want
to deal with someone from the area and ideally from your
local branch, not some regional person who is only
available a limited about of days and isn't familiar
with your local business needs.
* Do you have your
choice between paper or online; It's important to
some folks to still get those printed statements every
month with either copies of, or actual cancelled checks.
Not all banks offer printed statements etc. (or charge
an extra fee for it) so be sure to ask.
* Does 24 Hour Banking
REALLY mean 24 Hour Banking; Business owners often
have unconventional working hours and may need to take
care of admin banking tasks at odd hours and may need to
talk to a "real" person. What are the hours of
their 800# customer service and are there things that
can't be handled during odd/late hours.
* Do they offer good
online access; You'll want to look for features such
as bill-pay, the ability to transfer between accounts,
and an "app" for your smart phone to allow access to
your accounts from "anywhere".
I recommend a main operating account, a savings
account and if you're going to be accepting PayPal via
your web site, a separate account specifically to be
linked to your PayPal account. This protects your
general account from any unexpected PayPal activity.
Speaking
of
PayPal... just about everyone has a PayPal
account these days so I recommend offering it as a
payment option on your web site, in addition to a
standard merchant account.
Not everyone is
comfortable using PayPal but it seems like more and more
people are using it as their primary banking account,
especially if they buy and sell on eBay. It
doesn't cost you anything unless someone uses it.
You just need to be sure the funds are confirmed before
shipping product. Sometimes people use it with an
eCheck which can take up to 2 weeks to clear.
You will be asked to link
a checking account to your PayPal account and like I
mentioned above, it's best to have a special checking
account specifically for this. You can transfer
money back and forth between the PayPal checking and
your main operating account.
Many people have to use
their own money to get a business off the ground.
Others may borrow from family or friends. It can
be tough to qualify for a small business loan unless you
have a proven profit record and ample assets for
collateral, but it can be done. I
personally have never gone that route but I know there
are a lot of people who have got started, or have
expanded thanks to some financing. You'll want to
take this up with the small business banker at your
branch to see what programs they offer.
Here are the programs
available through the
SBA.
Peer-to-Peer Lending seems to becoming more prevalent.
They are sites that link up individuals who want to
invest in small businesses or are willing to loan money
to those who might otherwise not qualify for financing.
Here are some resources to check out this option:
*
Prosper.com
*
LendingClub.com
*
PeerLendingNetwork.com
Before signing up
with a peer-to-peer lending organization you must do
your homework. We do not endorse any of these
sites.
Here are some articles on Peer-to-Peer Lending that
may be helpful.
