Review: Capital One Business Banking for Small Businesses

Review: Capital One Business Banking for Small Businesses

Why would you need a bank specifically for your business when you already have one for your personal expenses? It’s important to keep your business banking and personal banking separate for a variety of reasons, but mainly for tax purposes and more credibility. When looking for the right small business bank for your business needs, there are many factors to consider. And your time is limited, so we are here to help by reviewing Capital One’s small business banking services.

Capital One Spark Business

To open a Capital One Spark checking and/or savings account, your business needs to fall within one of the following categories: sole proprietorship, partnership, limited liability company (LLC), corporation, nonprofit or small organizations. Once your entity has been established, you can open a separate account for your business needs.

Capital One Spark Business Checking Account

Right now, Capital One isn’t accepting new business checking customers while they make some updates to the product. We will be sure to check back and research Capital One’s enhanced checking account capabilities at a later time. However, the features of this checking account for current customers include the following:

  • No monthly transaction fees or limits
  • No minimum balance required
  • No monthly fees
  • No fees for Capital One or Allpoint ATMs (and they have over 40,000 fee-free ATMs nationwide)
  • Free debit card
  • Free online bill pay
  • Free electronic invoicing
  • Manage money with the Spark Business mobile app
  • Remote check deposit

Capital One Spark Business Savings Account

Making remote deposits and withdrawals from your Capital One account is easy, since transactions can be completed within the Spark Business mobile app. You can also mail in a check or deposit in person at a Capital One ATM. The app is also useful for transferring money to and from your accounts.

Using your debit card, you can make withdrawals at over 40,000 ATMs nationwide. There are 2,000+ Capital One ATMs and over 38,000 fee-free ATMs within the Allpoint network, making it cost-effective to withdraw. You can also make online transfers via web or the mobile app. Additional features of the Spark Business savings account include:

  • No minimum balance required
  • No monthly service fees
  • Spark Business mobile app
  • Earn interest (among the highest in the nation for business accounts)
    • 1.75 percent APY for 12 months
    • After the first year, continue to earn interest at their standard rate (currently 0.40 percent APY)

Other Capital One Spark Business Services

Capital One Spark Business Credit Cards

Capital One is known for offering business credit cards that feature various levels of rewards programs, such as cash back and travel miles.

The Capital One Spark Cash and Cash Select are great for receiving cash back on business spending. With the cash rewards card, you’ll earn cash back on every purchase you make for your business. Plus, the Capital One Spark Cash for Business comes with a sign-up bonus, a reasonable annual fee, and no foreign transaction fees.

  • Sign-up bonus: One-time $500 cash bonus after you spend $4,500 on purchases within 3 months from account opening
  • Annual fee: $0 for the first year, then $95
  • Cashback: 2 percent on every purchase you make with the card

If your business requires you to travel, Capital One’s Spark Miles and Miles Select for Business could be another option. With these cards, you’ll earn 2 miles per $1 spent on all purchases. You’ll also get a bonus welcome offer of 50,000 miles (equal to $500 in travel) once you spend $4,500 in the first three months.

Capital One Small Business Loans

During times when your small business needs extra cash, Capital One offers a variety of solutions for small businesses. There is a strict application process based on your creditworthiness, ability to repay and character, but this is nothing out of the ordinary for a loan application.

Here are some of the ways Capital One can help your business out with funding:

  1. Capital One can offer a small business traditional lines of credit and term loans starting at $10,000, with no financial statement required on lines of $50,000 or less. They also offer loans specifically for equipment or vehicles, starting at $10,000 for a term of up to 5 years with fixed monthly payments.
  2. If you’re looking to buy a new space, Capital One offers real estate loans up to $5 million. They’ll finance up to 85 percent of the property’s value, with terms of up to 20 years and amortization up to 30 years for preferred industries.
  3. Capital One offers business installments for owners looking to purchase long-term assets or expand operations.
  4. Lastly, the bank offers SBA loans that have features a small business owner may not get with a conventional loan (such as longer payback terms and higher borrowing limits).

The Bottom Line

We like that Capital One offers the ability to link your checking and savings accounts with your credit cards so you can manage all accounts in one platform. The bank also offers lower rates for small business loans to borrowers with existing relationships with the bank.

Capital One could be right for your business if you have many monthly transactions and cash deposits, because it offers unlimited transactions and a higher number of cash deposits before fees kick in. In addition, the savings account has competitive interest rates and is easy to access.

If Capital One’s business checking account were currently available, the bank could be an all-encompassing fit for a small business with a variety of needs. However, some of the credit card rewards are only redeemable when you spend a significant amount in a short period of time, and the high APR after just 12 months can put your company into unnecessary debt. It’s always best to do a full review of multiple business credit cards to see what fits your business needs best.

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