From the February 2001 issue of Startups

Online banking started as and continues to be primarily a consumer-targeted service, but the vital business banking sector is increasingly becoming a focus for banks big and small. If you're one of the millions of start-ups considering using an online bank, it can be difficult to decide which one of the local, regional or national banks will be best. In the table below, we make that choice a little easier by comparing and contrasting key features of the online offerings of some of the nation's biggest banks.

You'll see that you can do a lot of banking-probably far more than you would imagine-using only your PC and an Internet connection. And if you don't see what you need in the way of online access to banking services and information, be patient: John Hagerty, vice president of e-business applications at Boston research firm AMR Research Inc., says banks are preparing to offer online services that simply couldn't have existed before the Internet.

Can you imagine a bank that not only handles your checking account, but also supplies you with a third-party-hosted Web site and e-commerce software? That's already here. Before long, says Hagerty, banks that find instant financing for your customers' e-purchases, using online credit auctions to make sure your valuable customers get the best deal available, will be commonplace. "This stuff is just starting," he says. "Banks are realizing they can either be a commodity, or they can help make markets. Those that have foresight are choosing to facilitate commerce as opposed to just being there."

So here's our list. Note that basic business banking services are free at all these online banks, with occasional extra fees charged in some cases.


Mark Henricks, author of Business Plans Made Easy(Entrepreneur Press) and Mastering Home Networking(Sybex Inc.), writes on business and technology issues.

Bank Listing

Name/Web Site
Overview
Account Information & Management
Online Bill PaymentOnline Loan ApplicationsOther Services
Chase Manhattan Bank
The site is well-designed and easy to navigate, in part because it is small and offers a modest range of services.
. View account transactions for checking, credit card, line-of-credit and other accounts.
. Transfer money between accounts.
. Business account with only one signer can be linked to personal accounts.
. Free unlimited bill payment.
. Payroll Payment Service for $10 a month.
. Tax Payment Service ($5/month) lets you electronically pay federal excise, unemployment, income tax withholding and corporate income taxes.
None available.. Links from the home page take you to PowerPay third-party online payroll service and eWEBuilder Web site creation, hosting and e-commerce service.
. Alert warns you to transfer or deposit money as needed before making a scheduled payment.
. In some states, Quicken, Quickbooks and Microsoft Money users can bank online for additional fees.
Wells Fargo
As befits a bank that is both the nation's largest small-business lender and perhaps its leading online bank, Wells Fargo's Resource Center for Small-Business Owners offers far more than the usual online bank. It features a wide array of online financial tools, online shopping and more-both free and for-fee-in addition to the usual financial services.
. View account transactions for checking, credit card, money market and other accounts.
. Transfer funds between accounts.
. Order photocopies of cancelled checks and past statements online.
. Free bill payment with a minimum balance.
. ExpressPay service, available in most areas for $7.50/month plus processing fees, handles payroll preparation, tax payments and filings, and it direct-deposits employee paychecks. ExpressPay Plus offers more sophisticated features, such as filings for all 50 states
. No payment service available for federal, state or local tax payments.

Online applications are available for a range of financing options, including revolving credit lines, term loans, business credit cards, equipment and vehicle purchases and SBA financing for up to $1.5 million.

. Change addresses and order new checkbooks, traveler's checks, cashier's checks and foreign currency online.
. Several useful online tools, such as loan calculators, retirement planners and debt consolidation planners allow you to enter your information and perform calculations online.
Citigroup/Citibank
Bizzed offers what you'd expect from the world's largest financial services conglomerate, namely, a full range of financial services, online tools, news and information, and more. Its hip, interesting look is a welcome surprise.
. Business banking via Business Access, offered by Bizzed's Citibank parent. Note: Free Business Access software must be downloaded and installed.
. View account transactions for checking, savings, credit and other accounts.
. Transfer funds between accounts.
. Open new money market and certificate of deposit accounts. Stop payments of checks online.
. Free bill payment.
. Send domestic and international wires transfers in U.S. or foreign currencies.
. Pay taxes through tax payment module using bill payment or wire transfers.

Online applications can be completed in as little as 10 minutes for credit cards, credit lines, home equity loans and, through Citigroup's Travelers subsidiary, business insurance-and Travelers promises 24-hour turnaround on approvals.

. There's an impressive assortment of tools to help you set up your business for e-commerce, ranging from links to Web site hosting companies to tools to help you set up a Web site host and get your URL registered with major search engines.
. Many services are offered at discounts to Bizzed users. There are also many how-to guides on topics from hiring to finding venture capital.

Bank of America
Bank of America Business Center's nifty suite of productivity tools, administrative services, purchasing services and information make up for a relatively sparse offering of financial services, making this a promising if not world-beating site for small-business banking. The downside is that many services are provided by third parties that charge for their use.

. View transactions for checking accounts only.
. Transfer funds, get daily status reports and order statement and check copies.
. If you're the only signer on a business account, you can link with personal accounts.
. Employees who register can also get information about earnings and withholdings and even set up their own direct deposits.
. Online bill payment is available only if you use Managing Your Money financial software and pay a monthly fee of $5.95.
. The online payroll processing module is exceptionally easy to use.
. Manage approvals for invoices, time sheets, expense reports, purchase orders and even employees' requests for paid vacations.
. Get insurance quotes and shop for office equipment and supplies.

. Apply online for installment loans, credit lines, business credit cards, mortgages, lease financing and even factoring.
. An online credit kit of how-to guides, worksheets, financial calculators and comparison charts helps you select from a long list of financing

. This site provides an unusually strong set of communications tools for your company. You and your employees can see company directories; view schedules of company events; create to-do lists; fill out expense reports, invoices and other forms; initiate purchase orders; and track payments. Access to all of it is controlled by title and responsibilities.
. Automatic e-mail updates and reports facilitate sending information back and forth.