In the U.S., there are approximately 33.2 million small businesses currently operating. In many cases, creating a degree of separation between your personal and company finances is preferred, if not outright required. For example, if you operate a limited liability company (LLC), a business bank account may offer some legal protections, as it establishes a much-needed financial separation between you and your business.
If you agree that having a business bank account is a wise move, the next step is opening the account. Here’s a look at how to get a business bank account.
Tips for Choosing a Bank
Generally, the process for choosing a bank for a business bank account isn’t unlike exploring options for personal accounts. You want to examine key financial points, such as minimum balances, interest rates, and monthly fees.
Additionally, check for the availability of various convenience features. Payment processing – particularly credit card payment processing for customer purchases – bookkeeping platform integration, ATM access, Automated Clearing House (ACH) capabilities, and more can all be helpful to have.
Choosing a bank with leading online and mobile banking features is also wise. That can make managing your account easier, so it’s worth factoring into the equation.
Finally, read reviews to ensure the bank offers solid customer service. That way, you know you can get suitable support should the need arise.
What Services Will I Need?
What services you need may vary depending on the type of business you’re operating. For some companies, a business checking account with low fees and a variety of ways to pay expenses is sufficient. Some companies may do better with merchant accounts, as those usually come with extra payment processing services, allowing the company to accept credit and debit cards from customers when they make a purchase.
In some cases, extras like fraud insurance protection are a wise addition. Those limit financial losses and harm to a business credit report during incidents of fraud. Similarly, financial advisory services are helpful if a company has complex financial needs or wants to invest, while payroll processing makes handling employee paychecks and related obligations easier.
Ultimately, you need to consider the broad financial needs of the company. With that, you can identify the services that provide you with much-needed support and value.
What Documentation Will I Need?
Generally, you’ll need a mix of personal and company-related documentation to open a business bank account. That ensures there’s a clear connection between an appropriate company member – such as the owner – and the business entity itself.
Typically, you’ll need to bring a government-issued ID, as well as provide your contact information, birth date, and Social Security Number (SSN). If there are multiple owners, details about them are potentially necessary as well, depending on their ownership stake.
Providing an employer identification number (EIN) is typically required. Additionally, you’ll usually need formal documentation about the business entity, such as name registrations, business licenses, formation documents, partnership agreements, articles of organization, operating agreements, articles of incorporation, or others. Exactly what’s needed depends on your business entity type, so contact the bank in advance to see what’s required.
Navigating the Application Process
Generally, the application process is straightforward. Simply head to a convenient bank branch for your chosen institution with the required supporting documents and information. Once there, the teller or a business bank account specialist can assist with gathering the details and submitting the application, often wrapping up the process relatively quickly.
