Commercial Banks

• In the early days of commercial banks, so-named because they catered mostly to businesses, a bank would provide short-term working capital to a business enterprise in addition to financing long-term loans. Eventually, more and more commercial banks began to offer services to consumers. Today, commercial banks generally have different policies governing business accounts as opposed to private personal accounts.
  
  

Business Services

• Business banking services may include backing the credit of businesses in their transactions with other businesses through commercial letters of credit or bankers' acceptances. In other words, in a letter of credit, the bank vouches for the business and agrees to pay a debt if the business defaults. This practice greatly facilitates conducting business in foreign markets where the business may not be established but the bank is well known and trusted. In addition to the common checking and savings accounts services, banks may provide businesses with a revolving line of credit, payroll services and lock box services, in which the bank takes in direct payments from customers of the business.
  
  

Investment Banks

• Investment banks provide a multitude of services for large corporations, including underwriting and supervising the distribution of issues of securities, i.e., stock and bond certificates. Investment banks may also provide long-term financing to businesses, as compared to the more common short-term financing of most commercial banks.
  
  

Bank Policies

• According to Business.gov, despite heavy government regulation on financial business practices, banks have a wide leeway in setting their own policies and standards for dealing with customers. Bank management chooses which services will be offered, how much compensation the institution will receive for services, what interest rates will be charged on loans and paid on deposits, and what standards a customer must meet and maintain to obtain a loan, as well as other policies. Banks set their own hours of operation and the extent of electronic banking services offered.
  
  

Consideration

• In comparing and choosing a bank for business services, it is essential to first decide what services are needed to operate a specific business. Compare several banks to find the one that meets the needs of your specific business, while keeping in mind that choosing the right bank can have a significant effect on the ongoing success of a business over time.