The most basic financial institution, banking usually refers to commercial banks that accept deposits and makes loans. These institutions are ancient, with the prototypes dating to 2000 BCE, and the modern form dating back to the 14th Century, with oldest still operating bank is Banca Monte dei Paschi di Siena, continuously operated since 1472.
All businesses need basic services, but companies utilizing Profit First need a relationship with a bank that will let them set up multiple accounts. As your business grows, you will find that you may need additional services, including lines of credit, access to an SBA advisor, or upgraded business services.
During the COVID-19 Coronavirus Crisis, a high quality relationship could be the difference between getting your PPP Loan and not getting it. There are advantages to utilizing a local bank, a local branch of a national institution, or an online only option. Each company and its needs are different, and you need to evaluate what option is right for your company’s financial needs.
Sharing a name and some structure, investment banks are different financial institutions. These companies engage in advisory-based financial transactions, often with a focus on mergers and acquisition, corporate finance, and securities, but aren’t easily confused with the commercial banks that you utilize for your personal and business finances.
If you are building a hedge fund, setting up private equity, or otherwise involved in advanced finance, you’ll be familiar with working with investment banks, but most entrepreneurs and corporate executives will interact with a local branch or national retail chain.