Best Business Bank

[Nick Scalero]

Can someone recommend a good bank to open a business checking account? I recently moved my cash into a self-directed IRA with checkbook control and am now looking to put the fundssomewhere I can get to them.

I'd like to minimize expenses but still be able to earn interest on the cash sitting in the account.

Please tell me why yourrecommendation is "best".

Thanks,

Nick

[Bill Gulley]

Hi, First, interest is not generally paid on a business demand deposit account (checking account) until you get to a money market account. I'd suggest you build a relationship with two local banks, one that is owned locally and the other that is in a regional banking or holding company system. There are advantages to both depending on the kind of deals you want to do. No one bank can really serve all the needs of an investor, if you intend on growing.

Interview a bank, don't just walk in because they have great advertising.

Personal loans, check rates and compare terms. You don't have to apply to check them out.
Real estate loans, same thing, what's the current deal going for, what do they offer for investors?
Savings, well that's going to be really bad everywhere, but a bank that offers a higher CD rate is usually begging for money to lend!
Commercial loans, are they an SBA Lender? Do they work with USDA for rural properties? Do they make non-recourse loans based on credit, capacity and collateral? (Many won't)

In every bank, at the teller window, usually, there is a statement of conditions for that bank. From this you can tell who is (or really from the last accounting period) is/was lending and what the loan loss reserve and bad debts are. The higher the reserve and bad debts are as a percentage of capital the worse that bank is doing, generally. This may indicate a consevative lending policy. These reserves may be in excess compared to another institution.

As for personal credit cards and perhaps a smaller personal account, check out local credit unions. They tend to provide better service and offer lower rates, IMO.

When you talk to the bank, loan department, tell them you are considering establishing a relationship with them. (use those terms instead of sayin open an account), You're not looking for a place to park your money, you're seeking a business relationship! When they ask you how much you were planning on depositing (which means, do I have to pay attention to this guy) tell them your future deposits will be determined by the relationship we establish. Avoid a dollar amount, you might just say up to the insured amount at times and what ever we determine based on circumstances! Don't blow smoke at them because eventually, they might know, but initially, make them earn your business. And, in fact, the way many loans are underwritten today, they may never know your true net worth.

Good Luck, Bill