Choosing Business Account, Large Bank or Small Bank?

Opening a business account can be a troubling and stressful experience. The marketplace today is currently saturated with so many deals and offers that it is enough to make your head spin as you trawl through the reams and reams of associated literature. But what should you consider before taking the plunge and signing up for an account is who will control your business finances and ultimately the financial platform that your business sits upon.

For this reason alone it is not worth opening a business account with a minor bank that is just starting out or is not established in the financial markets. They may offer preferential rates and what may seem an unbelievable deal but you will pay in the long run.


A small bank may well not have the solid financial position that your business needs to succeed, with a global credit crunch currently taking hold on the financial industry, only the major banks have a decent chance of survival. The last thing you need is for the funds in your business account to disappear as your bank goes into liquidation.

Another reason to choose a large established bank for you business account is the services that may be on offer. You may have to pay more but large banks usually have on-site business advice that can be priceless in the early days of your operation. Either having an expert at your local branch or on the end of the phone is a useful asset that can do nothing but improve the chances of success for your business.

Without this expert advice that comes as a package with your account, taking the wrong turn is easy and could result in your business heading down the wrong path and falling by the wayside.

This said; a large bank is not always the safest option. The global credit crunch has touched even the highest echelons of the financial world. The current crisis with Northern Rock can be seen as an example of this, showing even the biggest financial institutions are susceptible to problems. One benefit however is that as a larger bank the government may step in and steady the boat so customers do not lose out.

There is little doubt that if it had been a smaller bank that had had the same problems as Northern Rock, the government would never have considered privatisation to save customer finances. Because of its large size, it is impervious; at least with the help of a socialist government who would prefer to privatise than let it go down the pan.

Knowing the funds in your business account are safe and solid is a vital element in business. Businesses are built from the ground up and without solid monetary foundations it will be hard for your business to succeed in a competitive market.

Starting a business is not easy, it is estimated that over half of all business fail in their first two years so making sure you have solid financial backing is essential. To succeed in business you need all the help you can get and a little luck, anything that can benefit your chances is worth pursuing.

Of course if everyone chose large banks when opening an account there would be no room in the marketplace for small financial institutions. I am not advocating the pure use of large multinational banks as this is unhealthy for a supposedly capitalist, free enterprise system, it worth remembering however that security should be your main concern.

Without a secure basis, your chances of success will be little or non-existent. Choosing a large financial institution that can provide advice and a worthwhile financial contribution is advisable.