Investor's wiki

Business Banking

Business Banking

What Is Business Banking?

Business banking is an organization's financial dealings with an institution that gives business loans, credit, savings accounts, and checking accounts, specifically intended for companies as opposed to for people.

Business banking happens when a bank, or division of a bank, just deals with businesses. A bank that deals chiefly with people is generally called a retail bank, while a bank that deals with capital markets is known as a investment bank. There are a few banks that deal with the two types of clients.

Understanding Business Banking

Business banking is additionally called commercial or corporate banking. Banks offer financial and advisory types of assistance to small and medium businesses as well as bigger corporations. These services are tailored to the specific necessities of each business. These services incorporate deposit accounts and non-interest-bearing products, real estate loans, commercial loans, and credit card services. Banks may likewise offer asset management and securities underwriting to their corporate and business clients.

In the past, investment banks and retail/commercial banks were required to be separate substances under the Glass-Steagall Act — otherwise called the Banking Act of 1933. That changed in 1999 after parts of the act were revoked. Under the new rules, banks could offer business, retail, and investment banking services under one rooftop.

Demand for business banking is expanding in the United States, as the business sector keeps on developing. Commercial banks have been declining beginning around 2002, when there were 7,870 commercial banks, compared to 4,708 of every 2018. This has fundamentally been due to mergers and acquisitions. The companies with the highest market share of corporate or business banking are Wells Fargo, JPMorgan Chase, and Bank of America, with JPMorgan Chase being the biggest commercial bank in the U.S., with 2019 incomes of $142 billion. It's important to note these banks additionally operate as investment banks and retail banks, permitting them to be diversified in the two clients and products offered.

Services Offered by Business Banks

Business banks give a large number of services to companies, everything being equal. Beside business checking and savings accounts, business banks offer financing options, cash management arrangements, payroll services, and fraud protection.

Bank Financing

Bank financing is a primary source of capital for business expansion, acquisitions, and equipment purchases, or just to meet developing operating expenses. Contingent upon an organization's necessities, business banks can offer fixed-term loans, short-and long-term loans, lines of credit, and asset-based loans. Banks give equipment financing, either through fixed-loans or equipment leasing. A few banks provide food specifically to certain industries like agriculture, construction, and commercial real estate.

Cash Management

Likewise alluded to as treasury management, cash management services assist businesses with achieving greater proficiency in dealing with their receivables, payables, cash close by, or liquidity. Business banks set up specific processes for businesses that assist with smoothing out their cash management, bringing about lower costs and more cash available.

Banks give businesses access to Automated Clearing House (ACH) and electronic payment processing systems to speed up money transfers. They additionally consider the automatic movement of money from idle checking accounts into interest-bearing savings accounts, so the cash surplus is put to work while the business checking account has just enough for the day's payments. Businesses approach a modified online platform that connects their cash management processes to their checking and savings accounts for a real-time frame perspective on their cash in real life.

Payroll Services

Many banks are able to give payroll services for small businesses. On the off chance that your business is new or too small to cause the expense of a bookmaker, many banks give software or specific services specifically geared towards payroll management. Beside banks, there are numerous independent payroll service suppliers. It's worth contrasting the costs and benefits of the two.

Fraud Protection

Fraud insurance is offered by banks to safeguard businesses from any kind of fraud that has happened in their checking accounts. These can incorporate tricky checks from merchants or employee fraud that can result from too many individuals approaching accounts, making transactions hard to trace.


  • Services offered under business banking incorporate loans, credit, savings accounts, and checking accounts, which are all tailored specifically to the business.
  • The biggest bank in the U.S. in terms of assets is JPMorgan Chase.
  • Business banking is a scope of services given by a bank to a business or corporation.
  • Banks are able to offer business, retail, and investment banking services under one rooftop.