Dan Kang is the vice president of finance at Mercury, a Microsoft for Startups partner that offers banking for startups at any size or stage. Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
Whether your company is bootstrapped or venture-backed, you deserve a business bank that fits your financial needs and grows alongside you. But with so many different solutions on the market, it can be difficult to know what to look for.
Over the years, Mercury has worked with more than 100,000 startups, so I’ve learned the ins and outs of helping new companies manage their finances. As Mercury’s vice president of finance, I know that choosing a great business bank account comes down to a few universal principles.
When picking the best option for your startup, here are five questions you should ask.
1. Does it offer a simple and intuitive online experience? How much time will I have to spend on banking?
You wouldn’t settle for a second-rate experience from other products you use, so why should you settle when it comes to business banking?
At the bare minimum, your business banking dashboard should be accessible online and available on iOS or Android so that you can bank whenever you want. The rest of your experience—regardless of platform—should be underscored by simplicity and quality. Here’s what you should expect:
- Easy and painless signup, even if you and your co-founders aren’t in the same room
- Quick and straightforward methods to send money
- An intuitive way to search for transactions
- Account permissions that make it effortless to give the right level of account access to the right people
- The ability to scale your account as your team grows by assigning virtual cards in seconds
2. Will it work for my business long-term, both when I incorporate and as I scale?
Chances are that if you’re in the market for your first business bank account, you’re within the first six months of incorporating your company. A business bank account is the most basic utility for building a startup, but choosing one can be challenging. To set your business up for success, you’ll want to find a solution that supports your needs at the very beginning of your journey and commits to sticking by your side as you grow. That flexibility helps you to avoid the hassle of switching banks. Your future CFO will thank you.
“Building a company has many moving parts. When considering a business bank account, choose one that gives you the latitude to customize your account experience for your needs and that has the tech to support third-party integrations with other tools that you use.”
As an early-stage founder, you should look for an account that is virtually free to use. Ideally, fees are minimal. But if there are fees, these fees should be transparent. Being able to send and receive money efficiently, whether that is through ACH transfers or wires, is another necessity. You should also consider exploring banking solutions that offer a free business savings account so that you can get a head start on planning for your startup’s next milestones.
Look for core banking features that align with your growth. For instance, as you scale, you’ll want a business bank that allows you to issue virtual and physical cards for your growing team. You should also keep an eye out for solutions that can help you earn some interest on your extra cash —such as through a Treasury management account that balances your risks and returns—rather than letting your cash sit idly. Additionally, you may want help from advisors or other educational resources on what financing options make the most sense for your business and industry (for instance, venture debt with competitive terms if your company is venture-backed).
3. Is it easy to customize my business bank account and integrate it with other financial tools?
Building a company has many moving parts. When considering a business bank account, choose one that gives you the latitude to customize your account experience for your needs and that has the tech to support third-party integrations with other tools that you use.
It’s not enough for your account to have a slick UI—you should also be able to customize it. Here are a few custom capabilities you might want out of your account:
- The ability to open multiple checking accounts and designate them for operations/payroll, AP, AR, and more
- Auto-transfer rules with advanced sweep conditions that can help you stay on budget
- Read/write API access that allows you to automate payments or reconcile transactions, transforming your cross-functional workflows and saving you precious time
- Tiered user permissions for admins, bookkeepers, and ‘card only users’, as well as deeper controls like multi-admin approval so that your company can set daily transaction limits
Bookkeeping, HR, and payroll systems can come with significant switching costs, so having the ability to mix and match integrations from various providers—like Quickbooks Online to automatically sync transaction data, or Gusto to manage employee benefits—can alleviate a huge burden. These integrations can also enable you to streamline your processes in one place, helping you build the Swiss Army knife of tech bundles for your business.
4. Does my business bank account come with reliable customer support and client services?
As a startup founder, you want to look for a customer support model that caters to businesses of all sizes, not just the ones with the heftiest deposits. A business banking solution’s first layer of access should be a user-friendly online experience where you can easily do things yourself. But when you inevitably have questions or run into challenges, you need support from a human being, no matter the size of your company. If a bank structures its customer support by tier, users can most likely expect more efficient, specialized assistance.
Rather than serving as gatekeepers for certain manual actions like sending international wires, your bank’s client services should be equipped to help you make higher-level financial decisions, like whether it makes sense for your company to pursue venture debt. In any business, there comes a time when you need to think about your financing options—and those options can be confusing. For these additional support needs, try looking for a business bank that will make dedicated relationship managers available to you who understand what it’s like to build a business and who can advise and educate on the capital solutions that make the most sense for the stage of your business.
5. Does it come with additional resources to help my company grow?
As a founder, building your business is the top priority—you don’t have time to research every little detail. Consider looking for a business bank that will go the extra mile to offer you a community of resources, unique insight, and deals that can help you accelerate your business right from the start.
As you build your company, surrounding yourself with a supportive startup community can be critical to strengthening your network—especially as you gear up for your next fundraise. Whichever business banking solution you go with, make sure you are joining a customer base of other founders. You might even find a solution that has created dedicated fundraising programs where you can make direct connections with investors.
Most traditional commercial banks are not built to serve startups and small businesses. As a result, they do not offer many startup- and small business-geared perks—and if they do, customers may need to qualify or receive special permissions. Look for a bank that offers customer perks and discounts through its strategic partnerships. It might even advertise perks from fellow customers, which could be an opportunity for you to promote your own business.
In conclusion, choosing the right business bank account for your startup involves considering factors such as 24/7 accessibility, scalability as your team grows, fair fees, customizability, and customer support. Careful consideration of these factors can help ensure that your startup’s banking needs are met, with the right combination of features and benefits to support your growth and success.
*Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
Mercury is one of several trusted partner benefits available to members of Microsoft for Startups Founders Hub. Members get expedited application approval and $750 cash when you deposit $50,000 in your Mercury bank account within 90 days of approval. In addition, members are eligible for $250,000 in accounting services, software and other perks. Members also receive free checking and savings accounts, ACH transfers, domestic and international wires, and more (up to $30,000 in value).
For more resources for building your startup and access to the tools that can help you, sign up today for Microsoft for Startups Founders Hub.