Running a small business is a little like juggling, except occasionally the balls spontaneously catch fire and you don’t know why. That’s why it’s good to make everything as simple as possible, especially when it comes to finances. To make things easier for you, we set out to find the best online bank for small businesses.
In this article, we’ll be talking about why you need a separate account, why online is often better for your business, and which is the best online bank for small business banking. Better yet, we’re going to make it as easy as possible, so that you can quickly get back to what’s really important: running your business.
Why Do I Need A Separate Bank Account For My Business?
Sometimes, people running small businesses will try to save money when starting out by using their personal bank account for business transactions. This is a mistake, and most banks won’t even allow it.
You see, your business expenses should be separated from your personal ones to avoid you being found personally liable for the actions of the business and allow you to complete your tax returns with relative ease. This would be majorly difficult for anyone working out of their home. I, for one, would forget if my certain dinners or transport counted as business expenses and would probably lose a lot of money.
Business accounts also allow you to:
- Apply for a business loan
- Look like a real business to your customers
- Accept card payments
- Be seen as a real business by the IRS
Why Should I Use An Online Bank For My Small Business?
Really, the question should be, is there any reason not to use an online bank for your small business? And the answer would be a flat out no. Online banking is simply one of the best choices for any small business, saving you time, working around your schedule, and still (most of the time) allowing you to access in-branch services. You might even be able to access some incredible online deals.
The best part about online banking is that everything can be done from your desk, whether you’re paying a bill or calculating expenses. This means no need to lose half your workday visiting a physical branch. Now you have more time to work on your business.
What Is The Best Online Bank For Small Business?
Okay, it’s time to get down to the real meat of the article. What is the best online bank for small businesses? We’ve scoured the small print and assessed the services offered to give you the lowdown on each of these eight banks, so you can pick the right one for you at the end.
Wells Fargo
This is the fourth-largest bank in the US based on total deposits, holding roughly $2 trillion in assets, but Wells Fargo prides itself on its devotion to small businesses.
Good Range Of Accounts
Wells Fargo doesn’t believe in a one-size-fits-all approach or in charging you for features you don’t need. Depending on your business type and size, you’ll need a different account to meet your needs, and Wells Fargo has four: Business Choice Checking, Platinum Business Checking, Simple Business Checking, and Analyzed Business Checking.
Excellent Lending Policy
Wells Fargo has an incredibly flexible lending program available to small businesses, offering short-term loans, SBA loans, and equipment finance. Additionally, you can access the more traditional medium-term loans and lines of credit. Your business can borrow $10,000-$100,000 from an interest rate of just 6.75%. Better yet, the small business loan applications are incredibly easy for business account holders.
Complete Financial Services Management
Wells Fargo business offers many full-service payroll solutions, including managing employee benefits, human resources, and tax programs. They also provide small business insurance to cover your company in the event of emergencies.
Online Tools
Wells Fargo offers a variety of online tools (i.e., text alerts, mobile app) to help you keep track of expenses, deposits, and cash flow. They also provide new payment technologies to allow you to accept contactless payments. Wells Fargo even allows you to integrate your QuickBooks accounting software.
Chase Bank
Chase is the biggest bank in the US, holding about $2.39 trillion in assets. It also has a significant small business banking program that might work for you.
Incredible Mobile Banking System
Chase Mobile Banking is accessible from any mobile device, which means that you can easily check on your finances on the go. Perfect if you need to look up numbers before a meeting.
The best part, though is QuickDeposit, a service that allows users to scan checks to deposit them electronically without visiting a branch. It saves you so much time, particularly if your clients don’t like paying via cash or direct deposit.
Good Range Of Small Business Lending Products
While Chase has typically preferred to handle traditional small business loans, they are branching out with a range of new options, including:
- term loans
- lines of credit
- SBA loans
- commercial real estate loans
- equipment financing
However, you can still borrow up to $500,000 with a small business loan, which will pay for some pretty extensive improvements to your company.
Rewards Points On Cards
Chase will give you and your employees free business debit cards when you open an account, which makes life a lot easier. However, it's their credit cards that really make the grade. They offer some of the best interest rates in the US, and you can get cash back on certain purchases with certain cards. It's an easy way to boost your earnings.
Decent Range Of Accounts
Chase offers three accounts to its small business customers, Total Business Checking, Performance Business Checking, and Platinum Business Checking. These accounts all serve different sizes and types of customers, but Total Business Checking is the most popular for small businesses.
Full-Service Payroll Program
Save yourself time and stress by managing your payroll (and payroll tax filing) online through Chase. Best of all, it's available for any size of business.
Capital One
Capital One’s extensive financing solutions shows that they are dedicated to small business owners. They don’t just want to be a bank, but almost a business partner.
Decent Variety Of Loan Products
Capital One offers several different loan products for small businesses, including equipment or business auto loans, business installment loan, SBA loan, or a working capital line of credit.
If you have a Capital One business account, then you may qualify for a “relationship-based” rate of interest on your loan. The idea is that if they know that you look after your business account, they can offer a lower interest rate.
Simple but Effective Small Business Checking Accounts
Capital One has two checking accounts for small businesses: the Spark Business Basic Checking and the Spark Business Unlimited Checking. This might seem like a downside, compared with the previous banks, but Capital One offers some crazy good benefits on their accounts. You can get unlimited transactions, high levels of monthly deposits, a waived monthly service fee, low initial deposits, and free business debit cards.
Good Credit Card Selection
Capital One has several business credit cards, all with their own perks, that are available to you. This can help you better manage your finances.
Access To Cash Flow Management Tools
Capital One’s online banking program is comprehensive enough that you’d literally never need to visit a branch or even call someone. (That sounds like heaven.) They even have the Spark Business IQ program, which is designed to help to manage your business’s cash flow, operations, and finances. It gives you access to guides that help you learn to manage your business and gives you ideas about maximizing growth.
Live Oak Bank
Live Oak Bank is completely digital meaning that there are no physical branches anywhere. This means that it is specially adapted to suit the needs of those looking for the best online bank for small businesses.
High Annual Percentage Yield On Savings
Live Oak Bank allows small business customers to open savings accounts and obtain certificates of deposit, with promising interest rates. Their Business Online Savings Account gives you 1.09% interest (that’s 12 times the national average!) and their certificates of deposit range from 2.45%-3.15%, depending on how long you want to keep your savings locked up for.
Great SBA Loan Provider
Live Oak Bank offers plenty of business financing, but their specialty is SBA loans. In fact, they’re an SBA Preferred Lender. This means that the SBA allows them to approve SBA loan applications on an expedited basis, so your money will be with you all the sooner.
No Monthly Maintenance Fees
Yes, you read that right. At Live Oak Bank, there are no monthly maintenance fees and no qualifications for achieving it. Now you can save even more money.
Bank of America
After 200 years in operation, Bank of America has a proven track record of helping small businesses. In fact, they’ve helped over 3 million of them.
Helpful Management Tools
Bank of America offers plenty of tools to help you manage your business, from their Intuit payroll and express tax system to their Clover Solutions management system that can handle payments, inventory, and employee rotas.
Incredible Lending
Bank of America has a number of lending options available to you, including:
- secured business term loans
- lines of credit
- commercial real estate loans
- equipment and vehicle financing
- SBA loans
They also generally offer competitive rates on long-term financing and tailored financing solutions for any companies in the healthcare industry.
Decent Checking Accounts
Bank of America offers just two accounts for small businesses: the Business Fundamentals account and the Business Advantage account. However, they still both offer a number of advantages, including a massively high amount of free cash deposits (up to $10,000 per month). Their online and mobile banking service is also award-winning, which means that you’ll find it simple to use from the get-go.
Azlo
Azlo is an online-only bank created specifically to meet the needs of freelancers, self-employed people, and those making money with their side-hustle. It’s backed by BBVA Compass Bank, so all deposits are FDIC-insured. Best of all, it’s completely fee-free. If anything, this seems like it was designed to be the best online bank for small businesses.
Great Tools To Help You Manage Your Business
If you’re banking with Azlo, you’ll find that they’ve streamlined your financial transactions by allowing you to:
- create and send invoices
- connect your business’s payment processing system – currently, they only use Stripe, but other providers are coming
- pay bills online
- create digital checks to be sent via mail
Simple Checking Account
Azlo only has one business checking account to cover all types and size of businesses, but there are some fantastic benefits to its simplicity. Especially not having to bog yourself down in fine print and jargon.
To start with, did I mention no fees? That’s no fees on bank-to-bank ACH transfers. No foreign transaction fees. Free ATM access at select ATMs – don’t worry, an in-app locator will help you find them. No required minimum balance. Free domestic and international wires. And the application? That’s free too.
Citibank
This bank can be found in six metropolitan areas across the US – New York City, Washington, DC, Chicago, Miami, Los Angeles, and San Francisco – and this covers a lot of small businesses. However, if you’re outside of those areas, then you can benefit from Citibank’s outstanding online services.
Diverse Financing Options
Citibank offers a range of longer-term financing options, including various types of commercial mortgages and installment loans. However, what they’re best known for is their business credit cards, which are great for short-term financing.
There are two Citibank business credit cards. One earns you American Airlines bonus miles each time you spend, which is great if you have to travel for work. The other is designed for Costco members, so it’ll suit anyone whose business involves a lot of Costco shopping (i.e., restaurants, pet kennels, etc.).
Great Range Of Checking Accounts
Citibank offers four different accounts with different features depending on the size and type of your business. This means you’ll certainly find something that will work for your business, and as your business grows, you can always switch to a different account.
The accounts are:
- Streamlined Checking Account
- Flexible Checking Account
- Checking Account
- Interest Checking Account
Axos Bank
This digital bank is dedicated to helping small businesses grow, so they offer a range of products to make running your business easier. They also pay interest on their checking and savings accounts.
High Interest Rates On Savings Accounts
Axos Bank has several savings options for business customers, with its Business Savings and Business Money Market accounts allowing you to earn an annual percentage yield of 0.80% on a $1,000 opening deposit.
A better interest rate is available with their Business Premium Savings account. Here you can get a rate of 1.06%. What’s the catch? You need a $25,000 initial deposit. However, there’s no minimum balance requirements or monthly maintenance fees. This means you can take the opening deposit back into your checking account after a short period and still receive the high interest rate on the smaller amount.
The best annual percentage yield comes with Axos Bank’s certificates of deposit. Here you can earn up to 1.35% if you’re willing to lock your money away for five years. Of course, if you need to withdraw the money early, you’ll be stuck with a fee, so consider whether you might need immediate access to that money.
Good Financing Options
Axos Bank has several different types of lending solutions, including lines of credit, commercial real estate loans, invoice factoring, term loans, and equipment financing. The best part is that you’ll be assigned a dedicated account representative to help you.
Good Range Of Checking Accounts
Axos Bank offers three accounts for small businesses, with their minimum deposit starting at just $100 and no minimum average balance. However, if you can keep an average balance of $5,000, then you can earn interest of 0.80% on your balance with the Business Interest Checking account.
With this account, you’ll also get free online bill pay, unlimited domestic ATM fee reimbursements, and up to 60 remote deposits per month.
Which is the Best Online Bank for My Small Business?
I would love to tell you definitively what is the best online bank for small businesses, but I don’t know your personal financial situation or your company. Instead, I’m going to give you some questions to help you figure it out on your own.
Grab a hot drink, a notebook, and a pen, then read the following questions to try and figure out what you really want from your bank. Try to think about what you need now and what you’ll need in a few years time as your business grows. (You might need to consult your five-year plan for that!) That’s how you find out which bank is the best for you.
- Do you need small business financing?
- What are your company’s monthly incomings and outgoings?
- Would you be okay if you could never access a physical bank?
- Do you want to do all your banking at one bank or use different banks for different products?
- Would you be okay with fees to access additional services?
Ultimately, the choice is yours, and I know you’ll pick the right bank. Now, I’d like to hear from readers in the comments section. Have you used any of these banks before? What are some things that other small business owners should think about before choosing a bank? And what do you think about online-only versus physical branches of banks? Let me know all that and more below.
