Best Banks for Small Business
Starting and running a small business is one of the most difficult challenges you can choose to take on. Finding the right bank will streamline your finances and give you room to focus on the dozen other tasks you'll face as a business owner. We looked at loans, deposit accounts and merchant services to find the best small business bank in each category.
Best Bank for Small Business Loans: Wells Fargo
As the largest business lender in terms of loan amounts and borrowers, Wells Fargo heads our list of the best banks for anyone trying to start or expand a small business. We found that Wells Fargo is the most active SBA 7(a) lender in the country, with almost $459 million in outstanding loans to over 1,500 separate borrowers at the beginning of 2017. These figures indicate that you may get approved for a business loan at Wells Fargo in circumstances where other banks might turn you down. Wells Fargo's massive network of branches and ATMs makes it a viable choice in most parts of the country.
Besides participating in the government's SBA loans, Wells Fargo also offers several of its own business financing options. It carries a greater variety of these loans than its largest competitors in Chase and Bank of America, reflecting Wells Fargo's interest in small business banking. The bank also takes the unique step of posting APR ranges for its loans online, information that most banks won't share until you meet with a banker. This gives you a general sense of the rates you can expect at Wells Fargo branches across the nation, making it easier to compare Wells Fargo's loans against quotes from other banks.
Wells Fargo Business Loans
|FastFlex Small Business Loan||Wells Fargo BusinessLoan® Term loan||Equipment Express® Loan|
|Best For…||new inventory, repairs, temporary costs||expansion, remodeling, product development||financing/refinancing equipment or vehicles|
|Starting Rate||13.99%||6.25%||5.25% or 5.75%|
|Term Length||1 year, with weekly payments||2 or 5 years||2 or 6 years|
Best Banks for Business Checking
We found two banks whose business checking accounts stand out as excellent examples of an ideal banking setup for a small business. Capital One and PNC operate branches in different areas of the country, so we've included analyses for both banks, as well as a discussion of how their account features might favor different types of small businesses.
Capital One's Spark Business Basic Checking and Spark Business Unlimited Checking accounts are the best choices if you're concerned about processing a high number of credit and debit transactions. This is the only bank we've found that offers free unlimited transactions, a significant advantage if your monthly traffic exceeds the 500 free transactions allowed on most other business checking accounts. With Spark Business Unlimited Checking, you won't have to pay any fee for cash deposits, either —provided, of course, you work within range of a Capital One branch or ATM.
The Spark Business Unlimited Checking Account also allows up to 5 free domestic wire transfers each month, which can be a great way to access this account if you're located far from Capital One's physical locations. You could use a Capital One account linked to the bank's merchant services for free unlimited credit and debit transactions, then simply transfer the revenue to a checking account at your nearby bank. This way, you'll avoid transaction fees while retaining local access to a physical bank for cash deposits.
Of course, if you're planning on taking out a loan, your banking situation will become more complicated, and the best bank will most likely be one that you can visit in person. You might need to work with a banker in person to hash out details and stay in touch with the bank as your financial needs change. Having all your banking in one nearby place makes it much easier to manage —so if Capital One is too far away, you might be better off looking closer to home.
We chose PNC Bank as another great place to open your business checking account thanks to its relatively high limits on free transactions and cash deposits. PNC also gives you many different ways to avoid the monthly maintenance fees on checking accounts.
PNC offers three different levels of business checking, but it makes our list of best choices for business banking based on PNC Business Checking Preferred, which costs $50 in monthly fees but provides the greatest number of useful features. You can avoid paying the fee with practically any combination of other PNC business products, ranging from loans and credit cards to PNC Merchant Services® for payment processing. Otherwise you can simply maintain $25,000 in your balance to waive the monthly fee.
PNC Business Checking Preferred – Some Monthly Fee Waivers
- Deposit payment proceeds from a PNC Merchant Services account
- Make $3,000 in purchases with a linked PNC business credit card
- Maintain a Visa Signature® BusinessOptions credit card
- Have $75,000 average combined loans with PNC
There are almost a dozen other PNC business services that qualify you for a fee waiver not listed above, so whatever your business needs, it's likely you won't need to pay for checking if you decide to bank with PNC. This is especially advantageous when you look at the benefits of PNC Business Checking Preferred, which comes with a monthly limit of $50,000 on free cash deposits and 1,500 free debit or credit transactions —the highest limits we found among banks. Whether your business revolves around cash or card transactions, PNC is an ideal choice.
Best Bank for Business Credit Cards: Chase Bank
Chase Bank has one of the most beneficial credit cards rewards programs for consumers, so it's not surprising that it provides some of the best credit cards for businesses as well.
Chase is one of our top business credit card choices thanks to its high rewards rates and broad categories for business-related expenses. Most small businesses will find it easy to meet the minimum requirements set by the bank. Even those looking to spend much less will find that Chase offers more than one credit card option that can fit into their finances.
Yet despite the advantages of Chase's credit cards, the bank provides far fewer details about its business loans and deposit accounts than most other banks. If you're considering banking with Chase in areas other than credit cards, you should call or speak with a banker to find out what options the bank has available for businesses like yours.
Best Banks for Businesses by Region
If your business operates in a part of the country where our top picks aren't available, we've included a few additional banks whose branches cover other regions and states. You can also use these banks as a way to measure the quality of your other local options.
Best for Businesses in the Midwest: U.S. Bank
U.S. Bank is our first choice for small business owners located in the Midwest. Its selection of loan types is greater than Wells Fargo, and the U.S. Bank Silver Business Checking Package comes with no monthly fee, a rare benefit you won't find at most other banks.
The placement of U.S. Bank branch offices show that it has a very different geographic focus than its larger competitors like Wells Fargo or Chase. Given the importance of branch access to a strong business banking experience, U.S. Bank's locations make it a better choice for businesses operating in areas neglected by the other national banks. In addition to participating as a lender in the SBA Express loan and 7(a) loan programs, U.S. Bank has its own loans for business development, commercial real estate and capital equipment.
U.S. Bank Business Term Loans
|Quick Loan for Vehicles||new/used vehicle financing||$5,000-$100,000||up to 6 years|
|Quick Loan for Equipment||equipment, business expansion||$5,000-$250,000||up to 5 years|
|Business Loan||vehicles, equipment, long-term financing||up to $2 million||up to 80 months|
|Equipment Finance||new/used equipment financing||$10,000-$500,000||up to 5 years|
The bank also has three tiers of checking options for businesses, which come with several discounts and credits on U.S. Bank's other business products. Business checking also gives you access to a higher temporary rate on the U.S. Bank Platinum Business Money Market Account, as well as lower preferred interest rates on loans for equipment financing. The number of free checking transactions and cash deposits you receive at U.S. Bank is fairly average, except for the free Silver Business Checking Package, which allows a very low $2,500 in monthly cash deposits —after which you'll pay $0.50 on every $100 deposited.
U.S. Bank Business Checking Packages
|Silver Business Package||Gold Business Package||Platinum Business Package|
|Balance to Waive Fee||-||$10,000||$25,000|
|Transaction Fee||$0.50 after 150 free||$0.45 after 300||$0.50 after 500|
|Free Cash Deposit Limit||$2,500||$10,000||$20,000|
Best for Businesses in the Northeast: TD Bank
For businesses in the Northeast, TD Bank is the largest and most widely available source of both loans and deposit accounts. If you do your personal banking at TD, it's a great place to start your shopping for small business financing.
TD Bank provides much less information about its business banking loans than the other banks on this list, but it's the largest bank operating in New England, so it's the best place to start looking unless you're determined to visit small local banks. Whether you're looking to expand your business with additional equipment purchases or new real estate, TD Bank offers loans of up to $1 million at fixed rates that depend on your credit rating. More detailed information will require visiting a branch and speaking with a banker about your specific needs.
On the other hand, TD is pretty straightforward about its small business checking accounts, and its premium option is one of the best available for the value.
TD Small Business Checking
|TD Business Simple Checking||TD Business Convenience Checking Plus||TD Business Premier Checking|
|Balance to Waive Fee||cannot waive||$1,500||$40,000|
|Transaction Fee||$0.75 after 200||$0.50 after 500||$0.35 after 500|
|Free Cash Deposit Limit||$10,000||$10,000||$40,000|
Given the number of additional benefits you receive with the TD Business Premier Checking Account, we think it represents the best choice for most business owners, with higher monthly limits on your free transactions and cash deposits, a lower transaction fee and discounts on the bank's merchant services. While paying a $30 monthly fee might be a big drawback on a personal account, it should be less significant from the standpoint of a business budget.
Summary of the Best Banks for Small Business
The table below offers a side-by-side comparison of the banks above. We've listed the monthly free limits for cash deposits and transactions for each bank's standard-tier small business checking option.
Finding the Best Bank for Your Business
With so many smaller banks ready to provide support to their local businesses, it's important to know how to evaluate your business banking choices. If you don't see what you're looking for in our article, you should keep a few basic principles in mind as you continue your search.
Determine Your Needs: Banks provide businesses with three key products: loans, deposit accounts and payment processing. Breaking down your banking requirements along these categories can help you determine which bank is the best fit for your financial situation and business patterns.
Shop Local: Like many aspects of operating a business, an effective banking relationship relies on cultivating personal relationships with your partners. This means that finding the best bank for business means shopping local. While online banking and lending options can be helpful to people with lower credit scores, being able to meet with a banker in person lets you receive more personalized services and terms that are more tailored to your specific needs.
Be Flexible: While doing all your banking in one place can greatly simplify your finances, there's no reason to accept your current bank's solution to every single financial need that crops up. For example, one bank might provide a better business credit card while another offers the better terms on your commercial lease. As your business expands and your operating model changes, the way you need to handle money will probably change too. Being ready to reassess your banking setup is important to avoid stifling your growth at a key moment.