Many people feel intimidated when approaching a bank. However, remember that you are the customer and the bank is there to serve your needs. So, when you set out to look for a bank, keep in mind that it is up to them to show you that they want your business.
Although a convenient location is a practical benefit, many business owners consider having a competent banker a higher priority. In other words, experienced small businesses will go out of their way to deal with a better banker because they have learned that a good one can make all the difference in the long run and a poor one can make your life miserable.
Here are a few do’s and don’ts when shopping for a bank:
DO:
- Ask for references from other businesses when shopping for a new bank.
- Find the best banker for your needs. Ensure you interview bankers to find the best fit.
- Be prepared! A bank may require you to have financial statements, business plans or inventory and asset information before they make their decision.
- Know exactly what you need when approaching the bank. Be ready to negotiate terms if needed.
- Prepare to use collateral.
- Maintain a strong credit rating.
- Shop for the best service fees. See if your bank offers a package deal to lower overall costs. Look at monthly maintenance fees, transaction charges, etc.
- Check for integration/digital tools - is the bank compatible with your accounting software? Does it have an app?
- Assess customer service accessibility and responsiveness.
DON'T:
- Choose a bank simply because the location is convenient, or there is an introductory offer. Short-term incentives will expire quickly.
- Assume a specialized commercial branch is your best option.
- Sign a contract or agreement without fully reading and understanding. Watch for fees for in-branch transactions, cheques, etc.
- Mix business and personal accounts. Keep finances separate to aid in credit building and precent compliance issues.
- Only look at traditional banks. Consider Credit Unions and digital-first alternatives as well to ensure you make the right choice for your business.
What if I encounter problems after picking a financial institution?
If you are having a dispute with your bank or financial institution, here are the steps to take to try to resolve any disagreement:
- To begin, always attempt to resolve your complaint by contacting the bank manager or customer service.
- If the issue does not get resolved, you should escalate it to a senior person at the bank or their Ombudsman's office. The Financial Consumer Agency of Canada has information on the complaint protocol required at your financial institution or bank.
- If you have exhausted the complaint protocol and are not satisfied with the results you can contact the Ombudsman for Banking Services and Investments for possible further assistance.
Additional Resources (Government of Canada)
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