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Wells Fargo vs. Bank of America Business Checking: Which Is Right for Your Business?



There are a ton of small business banking options out there to choose from, each with different advantages and disadvantages. There are small regional banks, credit unions, and major nationwide banks to consider. But if you’ve decided to go with a large bank for your business banking needs, you’re probably weighing out the pros and cons of Wells Fargo vs. Bank of America business checking accounts.

If you’ve gotten this far, it might seem like the hard work is behind you. Finding the differentiation points with Wells Fargo vs. Bank of America is no easy feat, though, particularly when the accounts have more similarities than differences. Weeding out accounts with vastly different perks, advantages, and drawbacks is a relatively easy thing to do. Picking out the minute details that can answer the Wells Fargo vs. Bank of America business checking debate? Way harder than it seems.

Whether you’re weighing your options in the Wells Fargo vs. Bank of America business checking debate or are merely looking to find the perfect business checking account for your shop, there are a few basic tenets to follow before making a decision. We’ll help guide you through the key components of Wells Fargo and Bank of America business checking plans, as well as what to look for from any checking account, depending on your needs.

What to look for in a business checking account

If you’re at the point where you’re debating Wells Fargo vs. Bank of America business checking accounts, you may have already done your homework on what to consider when finding the perfect business checking account for your company. But it’s more than possible that you, like many small business owners, simply want to dive in headfirst to get the tedious and frustrating business checking account setup process over with. It’s pretty tempting to jump ahead and pick an account without all the facts, but those who do end up doing so at their own peril.

It’s important to pick the right business checking account for your company as early as possible. Switching checking accounts only gets more annoying and complex over time, particularly once you have vendors and payment systems attached to a checking account and have to migrate them to a new bank. If you find the right bank straight from the start, you’ll minimize the need to move at all.

The best small business checking accounts come in different sizes within a single bank. Most major banking operations offer more than one checking account in order to provide different levels of service to their clients. If you’re just starting out, or don’t need a ton of services beyond paying vendors and getting paid, you’re going to want a straightforward account with low monthly fees. If you need more sophisticated tools (or simply more free transactions), you’ll want a different kind of checking account entirely. Knowing this differentiation point from the start will only help you in the long run as your needs change. The best banks support your company’s growth—both in the short term and long term, as well.

You’ll also want to consider other factors, such as monthly fees, which can eat into your account balance if you can’t qualify for the conditions that get these fees waived. Also be mindful of the number of cash deposits, wire transfers, and money moves you need to make every month, as most banks differ slightly from one another with regard to how much each of these activities costs.

Wells Fargo vs. Bank of America business checking: The basic accounts

If you’re weighing Wells Fargo vs. Bank of America business checking options for entry-level or no-fuss checking needs, you’ve got plenty of elements to consider. Both banks offer you many of the same core features you’d expect from financial institutions of their size: There are tons of branches throughout most of the United States, their online banking portal are among some of the best-designed in the market right now, and you’ll get solid customer service via phone or in-branch visits.

There’s more to the Wells Fargo vs. Bank of America business checking debate than just those details, however. Even if you’re just looking for a straightforward business checking account. You’ll need to consider factors like account fees, the minimums required in order to have fees waived, and smaller fringe benefits like dedicated small business customer service hotlines. Here’s what to know about Wells Fargo vs. Bank of America business checking accounts for small businesses with simple needs.

Wells Fargo Simple Business Checking

Wells Fargo Simple Business Checking is designed for smaller enterprises that really don’t need much more than the bare minimum from their business checking account. This account is great for sole proprietors, home businesses, and freelancers who merely need a place to stash their business cash (since you should always separate personal and business finances, of course!). This account comes with 50 transactions and $3,000 in cash deposits for free every month. All it takes is $25 to open a Wells Fargo Simple Business Checking account, and you’ll get access to the bank’s online banking portal, their brick-and-mortar locations, and even the Wells Fargo hotline exclusively for small business owners.

Wells Fargo Simple Business Checking is perfect if you’re just getting your business set up, or if you don’t anticipate needing a ton of banking support in the long run. Plus, the variety of Wells Fargo business checking accounts with more support and a greater amount of free items makes it easy to upgrade your checking when the need arises. Plus, you can waive the account’s $10 monthly service fee with as little as $500 in your account during each fee period. As an added perk, Wells Fargo lets you customize your debit card, as well, meaning that you can add your logo or just about any other design onto your account for a little more pizzazz.

Bank of America Business Advantage Fundamentals Checking

Bank of America Business Advantage Fundamentals Checking is another option for small businesses with fewer financial needs on a monthly basis. This account is designed for a similar audience as Wells Fargo Simple Business Checking, as it’s a great fit for sole proprietors, freelancers, and small businesses without a ton of overhead or payroll expenses. In exchange for a small (and easily waived) monthly fee, account holders get the bare necessities to keep their business financials humming.

Like Wells Fargo Simple Business Checking, Bank of America Business Advantage Fundamentals Checking focuses on providing account holders with the essential banking features without additional elements that aren’t likely needed. This means you’ll get 200 free transactions and $7,500 in fee-free cash deposits every month. That’s a better bang for your buck than Wells Fargo’s comparable account offering, which might help tip the scales toward this account in the Wells Fargo vs. Bank of America Business Checking debate. A word to the wise, though—this account comes with a $16 monthly maintenance fee, which can be waived with a monthly balance of $5,000 or with $250 in new purchases on a Bank of America business debit card.

The higher cap on free deposits with the Bank of America Business Advantage Fundamentals Checking account makes this one a clear winner versus Wells Fargo’s introductory-level account.

Wells Fargo vs. Bank of America business checking: For the mid-tier small business

After learning more about Wells Fargo Simple Business Checking and Bank of America business checking, you might not have the impression that either account is a sure thing for your company. If the intro-level accounts in the Wells Fargo vs. Bank of America business checking debate don’t quite satisfy your company’s needs, the good news is that both financial institutions offer accounts that are a step up in terms of free features, but without requiring account holders to keep mega-bucks in their account just to get monthly fees waived in return.

If you find yourself wanting more, but not necessarily needing the same kind of support that a mega-company might need, there are options on both sides of the Wells Fargo vs. Bank of America business checking divide. Here’s what to look for with each account, as well as our take on which one reigns supreme.

Wells Fargo Business Choice Checking

If you’re a growing company or are simply a little too big to have Wells Fargo’s entry-level account satisfy your needs, the Wells Fargo Business Choice Checking account might be a better fit. This account is great for small businesses that have two or more employees, larger-scale freelance operations, or startups that are just getting their footing. The Wells Fargo Business Choice Checking account provides 200 transactions and $7,500 in cash deposits for free every month. You’ll also get text and mobile banking as part of this account, as well as access to Wells Fargo’s National Business Banking Center or small business customer service phone centers. Plus, you’re entitled to fee waivers and discounts for business loans and business lines of credit with the bank in the future.

The Wells Fargo Business Choice Checking account is a great option if you need a little more from your bank, but without committing to a checking account that’s simply too big for your company. The $14 monthly service fee is pretty affordable for most businesses, and is easy to waive as well: a $7,500 average balance, $10,000 in combined balances across business accounts, and a slew of other qualifying transactions can help you skip this monthly charge.

Bank of America Business Advantage Relationship Checking

Not to be outdone, Bank of America also offers an account with a few additional features for growing small businesses—all without imposing huge fees or difficult-to-reach account balance minimums. You’ll have to do a bit more to qualify for a fee waiver than you would with Bank of America’s introductory-level account, or get ready to pay a little more in order to take advantage of some of the great features this account has to offer.

With the Bank of America Business Advantage Relationship Checking account, you’ll enjoy 500 transfers and $20,000 in cash deposits for free every month. Plus, if you need to accept incoming wire transfers as part of your business finances, you’ll be glad to know that Bank of America waives all incoming wire fees, be they from domestic or international accounts. You’ll have to pay for outgoing wire transfers, however.

This account comes with a $29.95 monthly maintenance fee, which is more than double what Wells Fargo charges for a comparable account. But on the other hand, you can have this fee waived by meeting one of two available conditions. So long as you maintain a monthly balance of $15,000 or more or become a member of the Preferred Rewards for Business program, you’re good to go.

The clear winner again is Bank of America. Their Business Advantage Relationship Checking account simply provides more for your money. So long as you can meet the fee waiver qualifications, and plan to take advantage of the additional free services the Bank of America account provides, there’s little reason not to opt for Bank of America Business Advantage Relationship Checking.

Wells Fargo vs. Bank of America business checking: For small businesses that need robust banking services

If the options we’ve covered in the Wells Fargo vs. Bank of America Business Checking debate haven’t fit the bill for your company quite yet, don’t panic. Both banks offer higher account tiers that include more free features and perks in exchange for a higher account balance, or by conducting more business with each bank.

These accounts aren’t perfectly suited for most small businesses, however. Both options are best pursued by small- and medium-sized businesses that have a longer track record, more cash to keep on hand in the account, and a greater need for more services at a better value. If your company is still growing and won’t quite satisfy the monthly minimums required to waive fees, you may be better off paying for the occasional wire transfer than a monthly account charge.

Wells Fargo Platinum Business Checking

Wells Fargo Platinum Business Checking pulls out all (or at least most) of the stops compared to the other business checking accounts we’ve covered. This account gives you way more for your money—we’re talking about more transactions, personalized banking, more flexibility with cash deposits, and can even earn you interest against your balance. There aren’t a ton of interest-bearing small business checking accounts out there, which makes the Wells Fargo Platinum Business Checking account worth checking out for this feature alone.

In addition to being an interest-bearing account, Wells Fargo Platinum Business Checking provides you with 500 transactions and $20,000 in cash deposits for free every month. You’ll also get fee-free stop payment requests, cashier’s checks, money orders, two fee-free domestic wire transfers, and two waived ATM fees every period. You’ll also get two service fee-free Platinum Checking accounts just for opening this account, and access to all of the dynamic online banking options that come with each Wells Fargo business checking account.

In a rare move for a robust, feature-packed account of its kind, you only need $25 to open a Wells Fargo Platinum Business Checking account. Waiving the $40 monthly maintenance fee is easy too: all you need to do is maintain a $25,000 average balance or have $40,000 in combined balances across two or more other Wells Fargo accounts.

Wells Fargo: Winning by default

Bank of America doesn’t provide a business checking option for this specific category—their two business checking accounts are it, unless you’re running a large corporation and need customized support from Bank of America Merrill Lynch. Odds are that any small business isn’t necessarily looking for that level of customized care, nor would they qualify. So on this tier, Wells Fargo wins by default. Even if there was a comparable Bank of America account, it’d be hard to beat Wells Fargo’s Platinum Business Checking account. Few small business checking accounts are interest-bearing, which alone makes this a great choice. The number of freebies that come along with it only sweetens the deal.

Wells Fargo vs. Bank of America business checking: The final word

There are plenty of pros and cons to consider when stacking up Wells Fargo vs. Bank of America business checking options. When it comes to lower-tier accounts where a smaller feature set is a worthy tradeoff for smaller account fees, Bank of America comes out on top. But if you need more support for your small business than either banks’ two introductory-level account options provide, Wells Fargo is the clear winner with its Platinum Business Checking Account.

No matter which account you choose, be sure to know what criteria you need to use in order to make the right decision. Every account has slightly different offerings, fees, and opportunities to waive those fees. By knowing where your business is now—and where you want it to be in the future—you’ll be able to make the right decision up front, and not have to switch banks when it’s harder to do so.


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Are Small-Business Loans Installment or Revolving?



A small-business loan provides funds to purchase supplies, expand your business and more. This type of funding can be either installment or revolving. Reviewing the credit terms of your loan offer will help you determine whether you’re being offered an installment loan or revolving credit.

Both types of loans can be found in the Small Business Administration, or SBA, loan program and at banks, credit unions and online lenders. While each can provide much-needed funding for your business, there are some key differences to keep in mind.

Installment loans vs. revolving credit

Installment loans provide a lump sum of money

An installment loan is a credit agreement where the borrower receives a specific amount of money at one time and then repays the lender a set amount at regular intervals over a fixed period of time. Typically, each payment includes a portion for interest and another amount to pay down the principal balance.

Business term loan is another common name for this type of loan. After the loan is paid off, the borrower typically must apply for a new loan if additional funds are needed.

Revolving credit provides flexible funds

A revolving loan is a credit agreement where the borrower can withdraw money as needed up to a preset limit and then repays the lender a portion of the balance at regular intervals. Each payment is based on the current balance, interest charges and applicable fees, if any. You pay interest only on the funds that you use — not the maximum limit.

A business line of credit is a common type of revolving credit. Revolving credit gives the borrower flexibility in determining when to withdraw money and how much. As long as the credit balance remains within the preset limit and you continue to make timely payments, you can continue to draw from the line again and again.

Differences between installment loans and revolving credit

The terms of a loan can vary depending on the type of loan, lender and your business’s credentials. Your loan may be a unique combination of terms. However, the following are some common differences between installment and revolving loan programs.

Installment loan

Revolving credit

Loan amount

Fixed amount.

Maximum limit.

Withdraw as needed.

Payment amount

Fixed amount.

Minimum amount based on balance and interest with option to pay more.

Interest calculation

Based on loan amount.

Based on current balance, not maximum loan limit.

Ability to renew

Not renewable, typically.

Renewable, typically.

  • SBA loans.

  • Business term loans.

  • Commercial real estate loans.

  • Equipment loans.

  • Microloans.

  • SBA lines of credit.

  • Business lines of credit.

  • Business credit cards.

When to use an installment loan

Set loan amount is needed

If you’re confident in the loan amount you need, then an installment loan may be the right fit, especially if you need the money in a lump sum. For example, if you’re using the funds to make a one-time purchase, you’ll likely want an installment loan.

Long-term financing needs

Some term loans can offer you more time for repayment when compared with revolving credit. When you stretch your payments out over a longer period of time, it can mean a lower monthly payment. However, that trade-off typically means you’ll pay more in interest costs over the life of the loan.

Larger funding needs

If you’re looking to purchase property, equipment or other large-ticket items, there are a number of installment loans that can be used for this purpose. Revolving credit limits are often less than term loan maximums.

Preference for predictable payments

With a set monthly payment amount, it can be easier to budget for an installment loan compared with a revolving loan, where the payment varies depending on how much of the credit line you use.

When to use a revolving loan

Short-term financing needs

Revolving credit can be good to handle short-term cash shortages or to cover unexpected expenses. Some businesses use lines of credit as an emergency fund of sorts since they’ll pay interest only on the funds they use.

Fluctuations in cash flow

Businesses that experience major fluctuations in their cash flows may benefit from revolving credit. For example, seasonal businesses that don’t have consistent revenue throughout the year can use lines of credit to cover operational costs during their slow season.

Preference for flexible loan amount and payments

If you don’t know exactly how much money you need, then revolving credit will give you the option to qualify for a maximum amount but only withdraw funds as you need them. This way, you’ll pay interest only on the current amount owed.

Compare small-business loans

To see and compare loan options, check out NerdWallet’s list of best small-business loans. Our recommendations are based on the lender’s market scope and track record and on the needs of business owners, as well as rates and other factors, so you can make the right financing decision.


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Advantages and Disadvantages of a Business Bank Loan



According to the Federal Reserve’s 2021 Small Business Credit Survey, banks remain the most common source of credit for small businesses — compared with options such as online lenders, community development financial institutions or credit unions.

You can use a business bank loan for a variety of purposes: working capital, real estate acquisition, equipment purchase or business expansion. To qualify for one of these small-business loans, however, you’ll likely need excellent credit and several years in business.

Before applying for a business loan from a bank, consider the following advantages and disadvantages.

Advantages of business bank loans

Flexible use of funds

Banks offer a range of different business loan products, including term loans, business lines of credit, equipment financing and commercial real estate loans, among other options. Unless you opt for a product that has a specific use case, like a business auto loan, for example, you can generally use a bank loan in a variety of ways to grow and expand your business.

When you submit your loan application, the bank may ask you to identify a purpose for the financing to evaluate the risk of lending to your business. Once you’re approved, however, the bank is unlikely to interfere if you change your intentions, as long as you make your payments. This flexibility is perhaps one of the biggest advantages when comparing debt versus equity financing.

Large loan amounts and competitive repayment terms

Bank loans are often available in amounts up to $1 million or more. Many online lenders, on the other hand, only offer financing in smaller amounts. Popular online lenders OnDeck and BlueVine, for example, both have maximum loan limits of $250,000.

Business loans from banks also tend to have long terms, up to 25 years in some cases. These loans usually have monthly repayment schedules, as opposed to daily or weekly repayments.

In comparison, online business loans typically have shorter repayment terms, ranging from a few months to a few years. Many of these loans require daily or weekly repayments.

Low interest rates

Banks typically offer small-business loans with the lowest interest rates. According to the most recent data from the Federal Reserve, the average business loan interest rates at banks range from 3.19% to 6.78%.

Although some online lenders can offer competitive rates, you’ll find that their products are generally more expensive than bank loans, with rates that range from 7% to 99%.

The interest rates you receive on a bank loan, or any small-business loan, however, can vary based on a number of factors, such as loan type, amount borrowed and your business’s qualifications, as well as any collateral you provide to back the loan. In general, the stronger your qualifications and the more collateral you can offer, the better rates you’ll be able to receive.

Relationship with a bank lender

Many banks provide ongoing support for their lending customers, such as business credit score tracking or a dedicated relationship manager to work with your business. Most banks also offer other types of financial products, such as business checking accounts, business credit cards and merchant services, if you prefer to use one institution for your financial needs.

Although some alternative lenders offer additional support and services, the Federal Reserve’s 2021 Small Business Credit Survey reports that businesses that receive financing are more satisfied with their experience with small banks (74%) and large banks (60%) compared with online lenders (25%).

Disadvantages of business bank loans

Intensive application process and slow to fund

To apply for a small-business loan from a bank, you’ll need to provide detailed paperwork that may include, but is not limited to, business and personal tax returns, business financial statements, a loan purpose statement, business organization documentation, a personal financial statement form and collateral information. You may have to visit a bank branch and work with a lending representative to complete and submit an application — although some banks offer online applications for certain business loan products.

The entire process, from application to funding, can take anywhere from several days to a few weeks, or even longer, depending on the type of loan and the bank. Some banks will also require you to open a business checking account with them before you can receive funds.

In comparison, alternative lenders typically have streamlined, online application processes that require minimal documentation. Many of these lenders also offer fast business loans — in some cases, funding applications within 24 hours.

Strict eligibility requirements

To qualify for a business loan from a bank, you’ll generally need strong personal credit (often a FICO score of over 700), several years in business and a track record of solid business revenue. Bank of America, for example, requires a minimum annual revenue of $100,000 for unsecured term loans and a minimum annual revenue of $250,000 for secured term loans.

Depending on the bank and the loan type, you may need to provide collateral, such as real estate or equipment, to secure your financing. Most banks will also require you to sign a personal guarantee that holds you personally responsible for the debt in the event that your business can’t pay.

Online lenders, on the other hand, have more flexible qualifications and some will work with startups or businesses with bad credit. To qualify for a business line of credit with Fundbox, for example, you only need six months in business, a credit score of 600 or higher and at least $100,000 in annual revenue.

Although online lenders may still require a personal guarantee, they’re less likely than banks to require physical collateral.

Find and compare small-business loans

Still trying to determine the right way to finance your business? Check out NerdWallet’s list of the best small-business loans for business owners.

Our recommendations are based on the market scope and track record of lenders, the needs of business owners, and an analysis of rates and other factors, so you can make the right financing decision.


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Fidelity Bonds: What They Are, How to Get One




Fidelity bonds are insurance policies that protect a business’s finances in case an employee steals from the business or commits fraud. Fidelity bonds are also known as employee dishonesty insurance.

You can buy a fidelity bond on its own or as part of a commercial crime insurance policy. Consider purchasing this coverage if your employees routinely handle money or valuable assets that belong to your business or your customers.

What are fidelity bonds?

Fidelity bonds are a type of business insurance that protects your business finances if an employee steals money or property from your company or customers.

This coverage can pay out to make your business whole if an employee or group of employees commits theft on the job. It goes by a few different names, including “employee dishonesty insurance,” “fidelity bond” and “employee dishonesty bond.”

Despite the name, fidelity bonds are insurance policies, not bonds. Historically, fidelity bonds were similar to surety bonds, which are agreements among the business owner, their client and a third party promising that work will be completed. Today, fidelity bonds are structured like insurance policies. Some companies still use the term “fidelity bond,” while others use “employee dishonesty insurance.”

Does your business need a fidelity bond?

Fidelity bonds are important for businesses where lots of employees have access to your business finances or customers’ property. Consider purchasing this coverage in the following instances:

If your employees have access to your business finances: Nonprofits, medical offices, professional offices and other kinds of businesses where employees make financial transactions are all at risk of employee theft.

If your employees have access to customers’ money or assets: If your employees regularly enter customers’ homes or businesses, a fidelity bond can set you apart from your competitors because customers know their assets are protected. This may be important for janitorial and cleaning businesses, HVAC businesses, plumbing businesses and other in-home service providers.

If you need this type of protection, look for business service bonds or third-party fidelity bonds, which specifically protect a business’s customers from losses due to theft.

If you work as a contractor or consultant: Clients may request that you buy a fidelity bond before beginning work with them. In this case, you’ll also want a business service bond.

If you work in the financial services industry: You may need a specialized type of fidelity bond known as a financial institution bond, which protects financial institutions. If you’re a pension plan trustee, you’re also required by law to have an ERISA bond, which protects pension plan participants and their beneficiaries.

How to get a fidelity bond

You can get a fidelity bond on its own or as part of a commercial crime insurance policy. If your business faces risks like forgery, computer fraud, extortion and counterfeiting, opting for a broader commercial crime policy may make sense.

NerdWallet recommends getting business insurance quotes from multiple companies so you can compare coverage details, coverage limits and premium costs before choosing a policy. Start your search for fidelity bonds with these companies:

If you need a business service bond to protect customer assets: Nationwide sells business service bonds, which cover your customers’ losses if one of your employees commits theft or fraud on their premises, as well as employee dishonesty bonds and ERISA bonds. Read NerdWallet’s review of Nationwide business insurance.

If your primary concern is your company’s assets:

You can also look into bonding companies, which specialize in products like surety and fidelity bonds. Merchants Bonding Company, for instance, was one of the 10 largest writers of fidelity and surety bonds by premium values in the first half of 2021, according to the Surety & Fidelity Association of America

How much do fidelity bonds cost?

The cost of a fidelity bond depends on the size of the bond, which is the most the insurance company will pay out to cover a loss.

According to BondExchange, a wholesale insurance marketplace that helps insurance agents find policies for their customers, fidelity bonds insuring five or fewer employees can cost:

  • $100 per year for a $5,000 bond.

  • $167 per year for a $20,000 bond.

  • $257 per year for a $50,000 bond.

  • $359 per year for a $100,000 bond


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