How to Choose a Bank for Your Startup

March 01, 2022

Startups have some clear “must-haves” in their earliest days: a great concept, a sound launch plan, an early source of funding, and sweat equity from founders and key talent. They also need a bank that understands what it takes to get a brand-new startup off the ground.

For many founders, the initial motivation for a banking relationship might be the need for a basic business checking account. But at this point, founders are actually making a choice that has sizable implications. Choosing the bank on the corner or a digital-only bank might seem convenient. But instead, selecting a bank with startup credentials and real commitment to early-stage companies offers tangible benefits.

Here are five things to consider in choosing your bank:

  1. Look for a focus on startups
    In truth, banking for startups is a specialized area of focus for financial institutions. In your research, assess whether a bank has dedicated teams, specialized product options and a set of resources geared to early-stage startups. Talk with your fellow founders, law firms and accountants for recommendations. Any business banker can accommodate a startup’s initial needs, but it’s helpful to look for an on-ramp to a richer relationship that can sustain your company as it grows.

  2. ‘No fee’ accounts demonstrate commitment to startups
    The words “free” or “no fees” are always attractive but understanding the why behind them is important. Banks with a commitment to helping startups scale their businesses understand the need to stretch every dollar. Certainly, read all the fine print, but a “no-fee” package of banking services and tools for seed and pre-seed startups is one way your bank can show support for your idea because when you are successful, so is the bank.

  3. Prepare for the future
    Business banks committed to the startup space should have targeted products and services for the earliest phases through growth stage, pre-IPO and beyond. As you explore differentiators, ask potential banks, “Do you have the tools and services I’ll need as my company grows?” You will want to discuss treasury management to make the most of your funds, as well as international banking capabilities. Importantly, check whether the bank offers debt financing to startups to complement venture funding, which can help founders retain more of their equity. Not all banks that provide banking services for startups will offer debt as the company grows, and changing banks is the last thing a busy founder needs to be doing while in hyper-growth mode.

  4. Ecosystem of expertise and resources
    You should be able to go to your banker for more than just banking. A plugged-in tech and innovation bank should be a connection to the tech ecosystem and know some of the best industry resources for startups. Check for partner resources – from savings and offers on key services, such as cloud services to HR/payroll support and more. Make sure the bank hosts industry events for founders to mingle with peers and investors, along with value-added webinars with industry leaders on relevant topics and offers you other insights.

  5. A lasting relationship
    With the avalanche of demands on your time as a founder, you can benefit from establishing a banking relationship that offers you a single point of contact for your startup business account. You want to know your banker and you want your banker to know you. This means personalized attention versus online chats and 800 numbers you can call.

Choosing a bank that fits your startup’s needs — for now and for later — can deliver real benefits for founders and their growing enterprises. Check outWestern Santander Bank's focused approach to Startup Banking, or contact Kelly Caviglia at [email protected]