It’s an exciting time in your startup business, and having a good bank to support you is vital to your success. That’s why having a one-stop-shop bank for your needs will keep you worry-free about finances as your company blossoms.
The best banks will provide you with free or low account fee checking and savings, business credit cards with low rates, credit card processing services, and business loans. As you work with one bank for your needs, you will build relationships with the banker who helps you so that they can advise you as your business grows.
Today we will look at five of the best banks for startups and how they can help you with your banking needs. Each bank we’ve selected is broken down further to explain its products and services and why we believe they are an excellent fit for any startup company.
Let’s dive in!
Try TaxRobot, Get an R&D Credit of up to $250,000.
Simple & Easy Setup for Maximum Returns.
Table of Contents
What To Look For In A Bank For Your Start-Up
Before we reveal our top five banks for your startup business, let’s look at what you consider when looking for a bank to work with for your startup.
Related Links: Startup Stages: A Guide To Every Step Of The Process
Well-Capitalized and Stable
When looking at stability, financial stability is essential because you don’t want the financial institution you are dealing with to go out of business. After all, it can majorly impact or disrupt your startup. Banks shutting down doesn’t often happen because most banks in the United States have FDIC-insured deposit products to offer their customers.
These financial products don’t typically offer the best yields, but it’s good to know that you are technically protected up to specific amounts.
At the same time, you could have trouble accessing your funds for a certain length of time if the financial organization goes out of business. For this reason, it’s crucial your company chooses a well-capitalized bank institution.
Excellent Customer Service Department
It goes without saying and seems a little obvious, but customer service is vital as you form close relationships with your banking and account managers. Phone support should be amply available to your startup, especially if you need to wire money or receive large amounts of cash.
Strong Technology Integrations
Keeping track of the many transactions you will need to do is much easier when you have access to integrated technology from your bank. Programs such as QuickBooks should be easily integrated with your bank feeds to save time and create an accurate record of transactions coming in and out.
A detailed bank feed should include dollar amounts, vendors, and dates of transactions. Plaid is a standard technology platform that institutions use to help with automating bank feed extractions. This technology makes it easier to move data from your bank into the software you use for accounting.
Are you looking for tools to help in the early stages of your startup business? Go to www.TaxRobot.com and learn about the tools available to you and your business.
Cash Management Services
Companies designed to raise money for venture capital will almost always have more cash than a traditional small business. Strong cash management allows you to earn interest on your bank deposits, and this can allow you to pay for extra personnel and support staff when you are starting out.
With that said, getting high yields is not always easy, especially with the lower interest rates we are experiencing right now. At the same time, the better institutions will teach you how to structure deposits to earn extra returns.
However, taking too much risk in cash management is not advised. When you get into more unique securities, such as auction rate securities, they might earn extra interest but also create too much risk beyond what your company can handle and the bank. Remember that the FDIC does not insure these exotic investments, so be careful with them.
Structuring deposits into multiple accounts is the best way to handle managing interest generated and running the business operations.
The last thing to look for is venture debt. It’s not always necessary, but it can be a great way to increase the success of a startup.
Related Links: Product Development For Startups: How To Get Started
5 Best Banks For Startups
Below we have outlined the five best banks for your startup business.
Silicon Valley Bank
Silicon Valley Bank (SVB) was founded in 1982 and has always focused on helping entrepreneurs and startup companies. They have a fantastic group of products to offer startups who are typing to ramp up their businesses.
They have fantastic customer support and work with venture capitalists and startups to give them the best opportunity for success. Silicon Valley Bank is also good at finding new solutions to their business’s products and service sectors. Let’s look at some of their products in detail below.
SVB has a fantastic money management program and provides bill pay and wire services, for example, that startups will need during the early stages. Venture debt also sets this bank apart because there aren’t many banking partners that will lend startups money or companies that are still losing money.
Most banks aren’t in the business of doing risky loans to smaller companies, primarily when they are federally regulated. That’s why it’s really challenging for bigger banks like Bank of America, Wells Fargo, and Chase to work with startups.
You will also like that SVB works hard to provide personal banking products that can help entrepreneurs and employees who may be short on cash. They also do capital call loans for venture capitalists who need to put money into their funds and home mortgages.
On top of this, they also offer student loans. They are very family-friendly for owners of startups and help you with margins if you need to buy a house while trying to get a startup business off the ground at the same time.
During these critical times, SVB understands that your cash flow and salary are low, but you have other assets that create a higher net worth for you and your family.
The final thing we want to bring up about SVB is that they also serve venture capital funds by offering a big fund money management business environment. They have been known to help foster relationships between startups and more prominent limited partnerships.
First Republic Bank
First Republic Bank is a fantastic bank for startup companies, and there are several that we feel give them a step up above the rest.
To begin, First Republic has taken the time to focus on its mobile apps and has taken the time and money to increase the technology they provide to its customers.
Up until the last few years, their mobile apps have been behind in the marketplace compared to the rest. Now that their apps are up to par with others in their class, it makes it much easier for startups to check balances, see deposits, and transfer money no matter where they are.
AdditionallyFirst Republic is very accessible because they have several branches located throughout the country. Most people preferbanks with the technology that allows them to do their banking at home. However, meeting with account managers in person is important for young startups to ensure everything is running smoothly.
The other nice thing about First Republic is that it offers mortgages to young entrepreneurs starting companies. They understand that your salary, in the beginning, is super low, and they are much more flexible than larger institutions such as Bank of America or Wells Fargo.
First Republic Bank also has an extensive venture capital network, and they help manage the bank accounts, the capital, and the loans for several VC funds. The bank’s relationships with the VC companies can be vital to be introduced to one of them and show them the vision of your new startup.
Related Links: Startup Valuation: How To Choose The Right Method
Rho Bank has become a popular banking app for entrepreneurs and startup companies. Starting in 2019 in New York, Rho Bank provides corporate cards, automatic bill pay, global payment options, wire transfers, expense management solutions, and much more.
Rho has their finger on the pulse of young startup companies and what they need to succeed in the business’s early stages. They are typically generous with their savings rates, which tend to be higher than most. Even though the number will change quite a bit, they will always be above your typical banks, such as Wells Fargo and Chase.
All your deposits at Rho Bank are FDIC insured, making it nice to know your money is protected and you can sleep better at night.
Money protection is a big deal, especially for venture-backed companies, because startups need an excellent bank to ensure this money is safe if they raise millions of dollars in funding. Most bigger banks only insure up to $250,000.
Rho can do this because they built a technology platform that allows you to split the venture capital raised into micro accounts to ensure your money is insured.
Rho is also making a run at Bill.com and essentially replacing them due to their superior user-friendly app that helps you pay your bills online, store invoices, and label transactions, all while syncing everything into QuickBooks.
Are you looking for a way to quickly calculate your ERC tax credits from the IRS? Check out TaxRobot’s AI-powered R&D Software that will save you time and money!
There’s another newer bank on the scene named Mercury Bank. It was started explicitly for early-stage companies and backed by venture capital money. It’s growing quickly and gaining notoriety in the startup world with all the products it offers.
Bookkeepers love this bank because it is easy to use, and all banking activity integrates easily with QuickBooks. The bank also makes it easy to integrate with other software applications to make banking with them a breeze.
Their spend management tools are excellent, making Mercury Bank a favorite for young start-up companies getting off the ground. On top of this, their reporting and tracking technology helps company founders quickly and easily know their cash expenditures.
Our last but not least recommendation for startup company banks is Bridge Bank. Founded in Silicon Valley in 2001, they have $50 billion in assets and are solid lenders for venture capitalists because they are part of Western Alliance Banking.
Bridge Bank has a product called Bridge Growth focused exclusively on startup companies. The bank offers a large group of services in specific categories, including credit cards, venture debt, and treasury, at low or no cost to help the cash-strapped startup thrive in its early-stage environment.
As Bridge Bank focuses on growing its business, they want startups to take advantage of programs and products that make it easier to run their businesses. For example, several of their checking and deposit fees have no cost up to specific amounts, and they don’t charge anything for monthly maintenance.
Bridge Bank also offers a high-yield money market account to venture capital-backed startups that have over one million dollars in their bank account. If that isn’t good enough, they give sign-up bonuses of $1000 to startup businesses who decide to bank with them and keep their money there for at least three months. Right now, the balance in the account needs to be at least $250,000, but this could change in the future.
And finally, one of the best features we like is that they have one single point of contact for each startup company. Bridge Bank has set up a system so that account managers in various departments work with startups to resolve issues and provide customer service.
This system also helps to get you the best loan rates possible when working with a relationship manager at Bridge Bank.
Choosing The Best Bank For Your Startup
When looking for the best banks for startups, there’s more to consider than just what the bank offers.
As you can see, when looking for the best bank for your startup, there is more to think about than just the products that a bank offers. Every startup has different banking needs and financial requirements that require delicate relationships with the people within the bank.
Support teams, pricing, account options, and budgeting requirements are essential factors to consider when choosing the best startup bank.
For more information on how TaxRobot can help your new startup, visit our website at www.TaxRobot.com and talk to an expert today!