In the realm of business, choosing the right banking institution is paramount for SMEs and entrepreneurs. This article explores offerings from several leading Canadian banks and a local credit union in BC. While we acknowledge the abundance of banks and offerings available, we cannot cover every bank and its offerings. The intent of this guide is to provide valuable insights to assist in choosing the ideal banking partner for specific business needs.
Who is it for?
- SMEs and entrepreneurs in Canada
- Retail Businesses
- Manufacturing Businesses
- Service-Based Businesses
- Technology startups
- Healthcare and wellness
- Professional Services
Why does this matter? When selecting a bank for your business, it’s vital to consider a few key factors: account options, tailored credit cards, small business support programs, tax filing ease, streamlined payroll, digital banking, merchant services, and compatibility with accounting systems like QBO. These factors directly affect operational smoothness and financial management effectiveness, making it crucial to choose wisely.
TLDR:
When selecting a bank for your business, consider specific needs based on your industry. Retailers value low fees and easy POS access, while manufacturers need overdraft facilities and quick loan approvals. Service firms should prioritize customizable features and credit card benefits. Tech startups need growth support and tailored debt solutions. Healthcare businesses benefit from professional account packages. Professional services need low fees, transaction tools, and credit options for expansion.
Banking Guide for Canadian SMEs and Entrepreneurs
Considerations for Banking Choices for Various Business Types:
- Retail businesses: prioritize banks with lower fees, easy POS access for card payments, and small business lending products to manage inventory and seasonal fluctuations.
- Manufacturing businesses: consider bank accounts with overdraft facilities, lines of credit, and small business loans with quick approvals to manage cash flow during production cycles.
- Service-based businesses: focus on bank accounts with low fees and customizable features like transaction management tools for managing client payment. Look for credit cards with perks like travel rewards and small business loans for business expansion.
- Technology startups: prioritize banking services that support their growth trajectory. This entails opting for banks with reasonable fees and specializing in venture and term debt tailored to tech startup needs.
- Healthcare and wellness: consider banks with professional account packages with low monthly fees and a high number of transactions. Additionally, explore small business support programs offering assistance for equipment purchases and business expansion.
- Professional services (legal, accounting, consulting, etc.): seek banks offering professional account packages with low fees, client payment management, and integration with leading accounting software. Look for good line-of-credit options and small business loans for expansion.
Account Features Across Different Banks
| Account Features | CIBC | RBC | Scotia Bank | BMO | Prospera |
|---|---|---|---|---|---|
| Basic Bank Account | $6/mth with $1-1.25/ transaction. | $6/mth with unlimited e-debits/credits/cheque deposits, 10 free outgoing e-transfers. Suits businesses with simple online banking needs. | $6/mth, with transaction fees starting at $1 depending on volume | $6/mth with 7 transactions, 2 free e-transfers. Unlimited Moneris debits & credits. | $5/mth, $0.9/ transaction, 2 free e-transfers. |
| Standard Bank Account | 1. Everyday Business Operating Account: $0/mth with $15,000 balance. OR. $20-25/mth with 30 transactions. 2. Advanced Business Operating Account: $0/mth with $35,000 balance. OR. $35/mth with 100 transactions. | $7/mth, with $0.75/e-deposit, $1.25/paper transaction, $1.5/e-transfer. | Plan A: $0/mth with $20,000 balance. OR. $20/mth with 25 transactions. Plan B: $0/mth with $35,000 balance. OR. $40/mth with 70 transactions. Plan C: $0/mth with $45,000 balance. OR. $75/mth with 125 transactions. For all accounts in this tier: 20 free e-transfers | Business Builder 1: $22.5/mth with 35 transactions. Business Builder 2: $45/mth with 70 transactions. Business Builder 3: $0/mth with $35,000 balance. OR. $80/mth with 120 transactions. For all accounts in this tier: 2 free e-transfers, unlimited Moneris debits & credits. | Business Plan 35: $20/mth with 35 transactions, 2 e-transfers. E-Chequing Account: $12/mth, unlimited e-transactions, 2 e-transfers. |
| Premium Bank Account | $0/mth with $45,000 balance. OR. $65/mth with unlimited transactions, including e-transfers. | $0/mth with $75,000 balance. OR. $100/mth. Unlimited transactions, 500 outgoing e-transfers, $25,000 cash deposit, 100 paper transactions, 10,000 bonus Avion points for Avion Visa Included. $50 fee waived on RBC Express core services. | $0/mth with $75,000 balance. OR. $120/mth. Unlimited transactions. | $0/mth with $80,000 balance. OR. $120/mth. 160 transactions, free e-transfers, unlimited Moneris debits and credits. | Business Plan 75: $45/month, no minimum balance requirement, with 75 transactions, 2 e-transfers. |
| Accounts for Professionals (Yes/No) | No | No | For professionals: $38/mth with 110 transactions. | No | No |
Other Banking Features
| Bank Features | CIBC | RBC | Scotia Bank | BMO | Prospera |
|---|---|---|---|---|---|
| Credit Cards-Starter | No fee, interest rate: prime+1.5 to 13%. | No fee, low limits, interest: 19.99% Visa credit line: no fee, interest: prime +2.9% to 11.9%. | No fee, interest: prime +from 3.49%. | No fee, interest: 19.99%, | No fee, interest: 19.99% |
| Credit Cards-Standard | One of the standard cards: Business credit card, $180 fee, interest rate: 12.99%. | N/A | One of the standard cards: Scotia momentum, $79 fee, interest: 2.99% for first 6 months, 22.9% after. | N/A | Low rate visa: $25 fee, interest: 12.99% |
| Credit Cards-Premium | Business plus visa:$120 fee, interest rate: 19.99%. | Avion visa infinite business: $175 fee, interest: 19.99%. | Passport visa infinite (for travel): $199 fee, interest: 19.99%. | World elite business: $149 fee, interest: 17.99% | Visa infinite business: $99 fee, interest: 20.99%. |
| Small Business Support Program | $1,000,000 Canada Small Business Financing Loan: variable-rate interest: prime+3%, fixed-rate interest: base+3% Black Entrepreneur Program Loan: Loan amount: up to $250,000 | RBCx (for tech innovation): Venture debt for tech startups. AWS: up to USD $100,000 credits ( for cloud computing services, storage, etc). USD $10,000 in business support credits for Venture Capital-backed startups $1,000,000 Canada Small Business Financing Loan | Small Business Term Loan: Up to 100% financing of business asset, limit: $1 million. $1,000,000 Canada Small Business Financing Loan: Offers $3 million for Income property lending (physicians/ dentists only) | Canada Small Business Financing Loan: Up to $1,000,000 in financing a commercial property $500,000 for leasehold improvements & equipment, business expansion, real estate purchase. Small Business Installment Loan: Up to $250,000 Installment Loan Plan: Up to $500,000. Fixed rate, flexible, longer-term loan | $1,000,000 Canada Small Business Financing Loan |
| Digital Banking | Yes | Yes | Yes | Yes | Yes |
| Business Tax Filing | Yes | Yes | Yes | Yes | Yes |
| Payroll Processing, Direct Deposit, CRA Filing& Remittances | Yes | Yes | Yes | Yes | Yes ($150 set up fee) |
| Merchant Banking | Cash management with Smart Banking: Handles payments, daily banking, account oversight, report generation POS: available for businesses. | Cash management with RBC PayEdge: Streamlines accounts payable with seamless integration, fast payments, and global capabilities. RBC Express Core Service ($50/mth): Offers financial management solutions with real-time data, streamlined transactions, enhanced security, and efficient customer service. POS: Partner with Moneris for POS and transaction processing. | Cash management with Scotia Connect: Includes EFT, wire payments, e-transfer bulk service, bill payment remittance, balances management, cash concentration, tax payment, Interac e-transfer for business. Partner with Chase for seamless payment solutions: online integration with e-commerce platforms, diverse POS options, next-day funding. | Cash management: Includes EFT, recurring payments, timely account activity, initiating payroll source deductions, money management Moneris Merchant Service: unlimited debit & credit card payment solutions, next-day funding. | Cash management: bill payment, EFT, Interac e-transfers, account monitoring alerts, online invoicing, record keeping, unified account access, multi-user access with approval levels, data transfer. Partner with Clover for POS credit & debit processing. |
| Integration to the latest accounting systems | Yes | Yes | Yes | Yes | Yes |
To sum up, choosing the right banking partner is pivotal for Canadian SMEs and entrepreneurs. This guide has shed light on key considerations across various industries, emphasizing the importance of tailored banking solutions. By assessing factors like account options, credit facilities, and digital services, businesses can make informed decisions that support their growth and success in the dynamic Canadian market.
