Small business banking: A complete guide

Originally posted on http://smallbusiness.co.uk/ — view article

Here, Christoph Tutsch, founder and CEO of ONPEX, reveals everything a small business owner should know when approaching banking, from opening an account to seeking a loan.

Everything starts with a great idea. You work out the product or service features, create concepts, build a prototype and maybe even have the first interested customers. Perfect, that’s a great start! But there is more to building an entire business than just the product.

Even just for starters, you must decide on the format of the business (eg PLC, LLP, sole trader), choose a company name, buy a domain and create a website, register your business, open a bank account, get an accountant, get proper insurance, maybe rent an office and hire employees. So there is a lot to be done before you can plunge into your new business venture.

This article will help you get a deeper insight into the banking part specifically. Many small business owners start with just opening a simple bank account, not analysing a broad spectrum of banks based on suitability. Maybe you have your own private bank account at this bank and trust them with your money. Several factors make very clear that choosing the right kind of banking services is necessary and a major opportunity to get your business basics right from the beginning.

What you need to know about small business banking

After the crisis in 2008, the financial sector saw many profound changes, particularly in the banking and payment sphere. Today, banks and financial institutions are being scrutinised even more than before the crisis.

However, the crisis also engendered growth and innovation, as seen in the rise of new types of banks: so-called challenger banks. Plus, new regulations like the European Payment Services Directive 2 (PDS2), which aims at making money transfers easier, more cost-efficient, and more secure, boost innovation. Fintech start-ups and, eventually, the consumer benefit greatly from this development.

The internet and other technological developments, such as mobile and identification and verification (ID&V) services, lead to new possibilities in banking. Consumers and businesses can choose from a vast range of different bank types and financial service providers that offer services designed to meet even the most specific requirements. The services they provide are more customer-focused than ever: They comprise fast and easily accessible customer services and support, flexible and modular services, and products that are available around the globe and clock.