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Date11 Apr 2022
AuthorShannen Balogh

Why Your Personal Bank Needn’t (and Shouldn’t) Be Your Business Bank

Pers vs Bus Banking
April 11, 2022
3 min read
Shannen Balogh Headshot
Shannen BaloghProduct Marketing Associate

Four signs your business banking has outgrown the services your regular bank can provide

It’s not uncommon for new business owners to keep their corporate finances at the same financial institution where they do their personal banking. It feels familiar, and there’s comfort in relying on services you know and trust.

This may work for a time. As your company scales, however, it’s bound to outpace the offerings a regular bank can provide.

Growing pains are to be expected for SMEs, but corporate banking doesn’t have to be one of them. 

In this post, we identify four signs your business is ready for stepped-up support and would benefit from the services of a focused commercial banking platform.

1. Your banking isn’t fueling your growth.

Both legacy banks and fintech partners base their underwriting and credit decisioning on factors like credit histories and account balances, resulting in low, fluctuating limits and hindering a business’s growth potential.

If you’re a high-growth company—and especially if you’re a young company with a thinner credit file—you need a banking platform that underwrites your business holistically and offers unsecured credit with no personal guarantees or required collateral.

Business-minded financial platforms get to know your operations inside and out and tap into nontraditional data points (like cash conversion cycles, client contracts, and founder histories) to get you the highest possible limit and sustain your growth as you spend. 

Consider our partners at Caraway, a fresh e-commerce transforming kitchens with nontoxic, nonstick cookware. They were scaling fast and surpassing the low credit limits imposed by their previous bank, sometimes causing critical ad operations to be cut off. Since switching to Rho’s corporate platform, they’ve seen a 300% boost to their credit limit.*

2. Your credit terms are too rigid.

When you own a business, no two months are the same. One quarter, you could have pressing inventory needs, necessitating lengthier payment schedules and greater float. Another, your ample cash flow could unlock opportunities for cash back and other rewards.

Business-minded finance platforms offer flexible terms that adapt to your operational rhythms and optimize your cash flow.

For example, American Vintners tailored Rho’s credit terms to their seasonal business, which peaks around the holidays. Now, they benefit from 30 days of additional float when they need it most and then enjoy higher cash back rates—up to 1.75%—when they’ve settled their invoices.

3. You manage your corporate finances on multiple, disconnected platforms.

One reason you might have chosen your personal bank for your business is a familiarity with its platform. In the short-term, this experience may pay off—but, let’s face it, legacy banks are rarely known for their tech-forward approach to finance.

When you need to track expenses, issue and monitor corporate cards, and manage accounts efficiently, the last thing you want is to be bogged down by multiple logins, an ineffective website, or an app that doesn’t communicate with your other financial tools.

The best corporate platforms integrate seamlessly between banking, AP, and card functions and automate everyday tasks like data entry and approval chains. 

For example, Rho builds all of these capabilities into one integrated dashboard and syncs directly with accounting software, saving finance teams loads of busywork. As a result, our partners at Gitcoin report saving two hours per week on AP tasks alone since moving their finances to Rho.

4. You’re not getting top-notch, personalized service.

According to McKinsey’s 2021 Global Banking Review, SMEs make up one-fifth, or about $850 billion, of annual global banking revenues. You’d think financial institutions would prioritize the needs of this growing market—but the opposite appears to be true.

Big banks just don’t have the bandwidth to pay attention to smaller clients, while digital-first fintechs tend to automate every experience and fall short when it comes to hands-on, human support. 

When you partner with a dedicated commercial platform, your business banking needs won’t be ignored. Rho, for instance, assigns a dedicated specialist to each company, learning about their unique journey and responding in real time to their financial needs. Our clients—like Outstanding Foods—consistently list this one-on-one, personalized service as an important part of their success.

“As an early-stage company, traditional banks treat you like a small business,” said Will Finkelstein, Outstanding Foods’ VP of finance. “We were looking for a great banking partner with exceptional customer service that could really respond to our growth.”

Level up your business banking solutions.

Modern, integrated spend management platforms like Rho are built for corporate banking from the ground up, so your business is treated like a business—no matter its age or stage. 

Instead of sticking with your personal bank for your commercial banking needs, consider partnering with Rho to enjoy greater growth, flexibility, integration, and support.

Connect with a Rho specialist today to learn more about how we can help your business.

*Rho is not a bank. Rho partners with FDIC-insured banks to offer its banking products and services. Rho cards are issued by Webster Bank, N.A., Member FDIC.