There are many factors that may precipitate a change in business banks, including dissatisfaction with your current bank’s customer service, outgrowing its financial product offerings, its inability to walk in your shoes or a desire to work with a bank specializing in your industry. Once you’ve done the research and found your new bank home, here are some questions to ask your new financial institution, to make the transition as smooth as possible.
With whom will I be working to transition my accounts and loans to this bank?
In most cases the team should be comprised of a cash management specialist, direct business line person and a credit analyst. Each of these individuals is able to review your finances from a different perspective, matching your business’s needs with the right financial products. In a well-managed bank, these people will work as a team on your behalf. In-depth communication on the front end will help your new bank better respond to your needs. In addition, ask how you’ll work with these individuals and others – will you have an opportunity for face-to-face introductions and meetings with the support team? Or will a phone/email introduction suffice?
Can you provide a checklist of transactions that can be impacted by the closure of existing accounts?
For example, in addition to establishing new accounts for accounts receivable and payable, your new bank should prompt you to list ACH payments, automatic set-ups, payroll and sweeps from operating lines of credit to your deposit accounts. Having a resource guide of line items will make you mindful of all the types of transactions you perform.
What financial statements, legal documents and other paperwork do I need to assemble?
Depository account and financial statements are often top of mind, but if you’ve had a long-standing relationship with another financial institution, you may not think to track down and supply the documents that describe the way your business is legally structured. This has a direct bearing on how your accounts are set up.
How will you communicate progress on the transition of accounts and loans?
Banks take different approaches to this; one may set up weekly touch-base meetings, whereas others may communicate on an as-needed basis. Be sure to express your preference with your new bank.
How long will the transition from my existing bank to this bank take?
The answer to this question is highly individual, as it’s based on the complexity of your banking relationships. A small startup business that writes 15 checks a month and has a single loan may transition its banking relationship within 30 to 45 days. In contrast, a corporation with more robust lending needs and multiple deposit accounts may require several months to ensure a full transition for everything to clear the existing accounts and move vendors to new accounts. This does not include, of course, the consideration phase in which you determine if the bank’s culture, products, rates and technology are a good fit for you.
Does the bank offer templates and other support materials, such as a switch kit, to aid in the smoothness of the transition?
You may have a long list of vendor relationships and maintain electronic payment arrangements and automated withdrawals with them. A great example of this is your credit card processing vendor. The process of communicating your change of financial institution can be made simpler when using templated letters and forms the new bank provides to help you communicate this change.
As with many business activities, there is no one-size-fits-all timeline or approach to changing business banks. But it can be a smooth process if undertaken with a methodical and systematic approach, and by keeping the lines of communication open with your new bank.