Small business owners understand the power of the human touch. It’s one of the last advantages that a brick-and-mortar business, or even a small e-commerce company, has over corporate behemoths like Amazon and Target.
The value of human interaction isn’t just between business and customer—it’s also important to business owners when choosing a bank.
When opening a business checking account (a must when starting a business), business owners tend to go with their local bank. According to a BAI survey, 79% of business owners use the same provider for both their business banking and their personal finances. It’s a place where they know the tellers, can shake the hand of the person offering them financing, and where they feel comfortable discussing the ins and outs of their business. Plus, it’s convenient.
There is an even more convenient option, of course: online-only banking. That’s not the same as banks with online portals and capabilities, but a bank with no physical locations, only a digital footprint.
There are pros and cons to using an online-only checking account for your small business. Since your options for opening up a business checking account online are limited (more on that in a second), it’s worth exploring what those two options—as of this writing—can do for you.
How to open an online-only business checking account
Surprisingly, it’s more difficult to open a business bank account online than a personal bank account.
The process of opening a business bank account online is a holdover from a bygone era, although not without reason. The USA Patriot Act requires that banks certify the identity of their account holders, which is a bit harder when dealing with employer identification numbers (which can cover more than one person and are required if you’re more than a sole proprietor) as opposed to Social Security numbers.
As a result, online-only business checking accounts are few and far between. But in this age of tech disruption, you do have a few options (and no doubt more will join their ranks soon). Your two main options are: Azlo and Axos Bank. Both of these options have similar benefits and drawbacks that come with opening an online-only account.
The benefits of an online-only checking account
For one, online-only accounts don’t need to charge a ton of fees in order to pay for their overheads, like the rent on their physical spaces. So, neither Azlo nor Axos charges a monthly fee for their accounts, and have no average daily balance requirement. (Axos does require a $1,000 minimum deposit to open the Basic Business Checking account.)
If you’re using these online banks, you’ll have a lot of the same capabilities that a bank with a brick-and-mortar location might. You can deposit checks (remotely), find ATMs to make cash withdrawals, and use your physical ATM card to make purchases, just as you would with any other card.
Azlo in particular also comes with a ton of online features that will help lessen the burden of no physical locations, such as online payments and transfers, unlimited ACH transactions, and seamless integrations with your POS and sales platforms, as well as with platforms and tools like Square, Stripe, Intuit, and Xero.