Some small business owners learned early in the pandemic how important it really is to have – or not have – the right bank in their corner.

The recent experiences during COVID-19 have left many wondering if it’s time to switch banks, and certainly serve as a reminder of why the bank you choose for your small business matters. Here’s why:

Business Accounts and Beyond

Even in startup stages, the advice is loud about keeping your business and personal money separate.

“As soon as you start accepting or spending money as your business, you should open a business bank account,” the SBA says.

Separate finances are important for tax and legal purposes, but a bank may offer specialized benefits with your business checking and savings accounts or business credit card, which can be important even if you don’t need it now.  

“Business credit is a big deal, and one quick and easy way to start to build it is by obtaining a business credit card,” says Small Business Majority in a post on its Venturize website.

“In addition to fantastic perks like building a credit history for your company, a business credit card will help you eliminate the need for personal credit cards for businesses purposes.”

Not sure where to start? Read this article to find out 3 Things You Need to Do Before Applying for a Business Credit.

Also, look at advantages of other business accounts, such as a merchant services account, which allows you to accept credit and debit card transactions from your customers, as well making fee and rate comparisons.

The Relationship

While everyday transactions are important, it’s the long-term relationship – or the potential to build one – that may end up mattering the most.

“Cash flow issues are often more urgent for small businesses, particularly in times of crises, as so many saw during the initial shutdown as well as the months that have followed,” notes a Harvard Business Review article.

Small businesses that have relationships with banks reportedly experienced smoother approvals and expedited processing for funding through assistance programs aimed at easing COVID-19 burdens.

“All of the banks that we have talked to say that they are prioritizing their regular customers,” said the HBR article, which focused on a survey of about 5,800 small businesses in partnership with the group Alignable.

Even with a dire need of a cash infusion, some small businesses in the survey said they didn’t plan to seek assistance over concerns they wouldn’t qualify. “They were worried about the complexity of the process and the hassle involved in getting a loan, or they wouldn’t get the money in time.”

Fit for Your Business

Small businesses benefit the most from a bank that matches their type of business, size and industry. One that also fits with your priorities and individual style.

For example, a smaller, regionally focused bank may be more familiar with local market conditions and have a stake in the community and local businesses.

“They often provide more one-on-one access to a loan officer and put more emphasis on a borrower’s character rather than just applying a credit-score model,” says a guide published by The Wall Street Journal. “And they can be more flexible during tough times, such as covering overdrawn accounts without imposing stiff penalties.”

You may also prefer some bank benefits over others, such as online services that help save you time and money on tax and accounting assistance, including sending invoices, collecting payments and payroll.

But often the best fit will come down to your loan and credit needs, now and in the future.

“The main pillar of what sets small businesses apart in terms of banking needs is lending,” says Bob Seiwert, senior vice president of the American Bankers Association and director of the ABA's Center for Commercial Lending and Business Banking.

“Even if you don't need a larger line of credit today – or in the foreseeable future – you should know whether your current bank has a track record of lending money to companies of your size in your industry,” he says in an Inc. article by senior writer Christine Lagorio-Chafkin.

Inquire within your own network – your accountant, lawyer, insurance agent, etc. – for recommendations on which bank may be a good fit.

"When you're looking for a banker, you should be looking for someone who fits in on that team, and who can give you good ideas on how to solve challenges when they're financial in nature," Seiwert says in the Inc. post. "These people are not your board of directors, but they can work together to help you."

Worth the Switch

Whether you’re searching for a more robust banking experience or just want a bank that can give you access to support or build a relationship, look at banking products and reviews from other business owners.

“At the end of the day, if some part of your business bank account service is negatively impacting you and your business operations, it’s time to see what else is out there,” writes Randa Kriss in a post for Fundera.