Preferred Banking for SMB’s

Free money, The Economist

The list

Here is our preferred list specifically for SMB’s which we are constantly updating. Our defining criteria : (1) user experience, (2) customer service, and (3) integration with 3rd party applications (QBO, Xero, Bill dot com, expense systems):

  1. Airwallex
  2. Brex
  3. Capital One
  4. City National Bank
  5. Farm Credit Services of America (FCSA/FFC)
  6. Mercury
  7. Novo
  8. Relay Financial
  9. First Republic Bank
  10. BBVA now PNC

Vetting credit unions

It certainly helps to work with smaller banks and credit unions if face-to-face is your thing. Since credit unions vary from region to region, I’m hesitant to build out a comprehensive list or share the ones we work in Texas or California. However, here are some questions you’ll want to ask if you do choose to interview a credit union:

  • Do your bank feeds work well with Quickbooks or Xero? Some banks are honest that their online portals are clunky. I’d need a 10% interest rate to forego ease of use and integrations, so that’s a big red flag for me. In my accounting practice, we will move clients OFF of these institutions because it’s not worth it.
  • What are wire fees in/out? Bigger banks tend to have an edge here, we’re used to seeing a per wire fee with some credit unions, which can add up (as a comparison Chase has a one-time $25/mo fee for up to 25 wires and Farmers & Merchants in Southern California charges $25/wire whether it’s in or out but checks are free).
  • What are monthly fees? Are there minimum balance requirements or balance amounts that waive fees? Many credit unions will charge a monthly fee, that’s the price of relationship.
  • How do I call you (relationship manager) directly? Our credit union banker will take my call directly and set appointments with clients who need to create a new account. This was helpful during PPP, as they personally checked on my application.
  • Are there any promotions for lines of credit? auto loans? personal loans? This may be reason enough to have some business at another bank. RBFCU had a 1.0% auto loan promotion as long as you had a savings account. My wife and I use this savings account for our annual tax payments (we rather collect interest than to overpay the Department of Treasury).

Final thoughts

For several reasons, we recommend a comprehensive treasury approach that utilizes at least two banks. For SMB owners, you’ll need at least three banks in order to keep some personal accounts separate and prevent easy transfers between business and personal (these should be conscious and planned with plenty of friction).

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Miguel Alexander

Miguel Alexander

Tax, Strategy & Culture, Real Estate, Trends, and Father of Three Future Value Creators