Discover the three types of information you'll need to open a business bank account along with recommendations for some business bank accounts that we like....

Discover the three types of information you’ll need to open a business bank account along with recommendations for some business bank accounts that we like…. Our content partner Nav.com has the details!

 

Opening a business bank account is an important step in the timeline of any new company. Without a business bank account you could have trouble establishing commercial credit. You might also face challenges when you try to qualify for financing or keep the clear accounting records you’ll need when it’s time to file your business tax return. 

There are clear advantages to opening a business bank account as well. For example, managing company cash flow is generally a lot easier when you keep your business and personal finances separate. If your business is ready to start spending money or receiving money from customers, the best time to open a business bank account is now. 

 

What You Need to Get Started

Ready to open a business bank account for your business? Below you’ll find three types of information you need to get started. 

1) Know your business’ identity. 

Whether you visit a local bank branch or open a business checking account online, you’ll need to be prepared with some basic identifying information about your business. This may include: 

  • The Name of Your Business — You should provide the bank with the legal name of your business, as it appears on any documents filed with the state or Internal Revenue Service (IRS). 
  • Your Employer Identification Number (EIN) — If your business is an LLC or corporation, your bank will most likely request your EIN number to open a bank account for your company. Most banks require this information to make sure your business is legitimate.  
  • Your Business Address — Ideally, this should be the same addressyou used for licensing or official business filings (LLC or incorporation). 
  • Other Contact Information — A bank may also request other contact information for your business when you set up a new account, such as your company phone number, website, and/or email address.

2) Be prepared to share personal details. 

In addition to sharing information about your business, you’ll also need to let the bank know a few personal details about you, the business owner. These personal details may include: 

  • Your Social Security Number — If your business is set up as a sole proprietorship, you should be prepared to hand over your personal Social Security number (and perhaps even a copy of your Social Security card) when you open a new business bank account. 
  • A Copy of Your Driver’s License — Many banks will want to make a copy of your valid driver’s license when you open a new business bank account. 
  • Additional Proof of Identification — You might need to provide additional proof of identification, such as a passport or alternate photo ID. 

3) Have your business formation documents. 

Finally, you should be prepared to bring or upload copies of your business formation documents whenever you apply to open a new business bank account. A bank might request copies of any of the following, based on your type of business entity:

  • Partnership Agreement — Is your business legally set up as a partnership? If so, be ready to provide a copy of your partnership agreement when you apply to open a business bank account. 
  • Articles of Organization — For LLCs, you should be prepared to provide your Articles of Organization. 
  • Articles of Incorporation — If your business is set up as a corporation, the paperwork you’ll need to provide the bank when you apply to open a new account is known as your Articles of Incorporation. 
  • Business License — Depending upon the industry in which your business operates, a bank might request a copy of your business license(s) as well. 

 

Business Bank Accounts That We Like

Now that you know what type of information you’ll need to provide to open a business bank account, it’s a great time to choose the bank account that’s best for you. Your best bet is to review different options, compare features and pricing, and figure out which option sounds like it will be a good fit. 

Here’s a look at 3 business bank accounts that we like to help you get the comparison process started. 

Azlo is our favorite free online bank. 

Opening a business bank account doesn’t have to be expensive. In fact, Azlo offers a completely free online account option for small businesses that aren’t fans of the monthly service fee. 

Azlo’s business checking account boasts the following features that make it an attractive option for freelancers other small business owners alike:

  • Zero fees (including maintenance fees, transaction fees, etc.)
  • Easy online account management from your computer or device
  • No minimum deposit required to open an account
  • Easily connect to popular online tools (QuickBooks, PayPal, TransferWise, etc.)

On the negative side, Azlo doesn’t have physical branches. So, you’ll need to do all of your banking online. If you’re a face-to-face kind of person or your business needs the option to make cash deposits, traditional financial institutions might be better suited to your needs. 

Bank of America won our “best business checking account.” 

Nav’s winner for best bank for small business, Bank of America, offers companies a lot of perks. When you combine the bank’s business checking benefits with its potentially low fees (if you qualify for a waiver), it makes an excellent choice for a business checking account. 

Bank of America has two different offerings when it comes to business checking accounts — Business Fundamentals and Business Advantage. 

Here are some key features that might make one of Bank of America’s business checking accounts a good choice for your company:

  • The potential to avoid monthly fees of $12 to $29.95, based upon where you live and the type of account. (Information on how to qualify for a fee waiver is available here.)
  • Easily conduct business in-person, including cash deposits, at thousands of branches nationwide
  • Free business debit card and employee debit cards
  • Free ATM withdrawals within Bank of America’s extensive network of over 16,000 ATMs
  • Open a business savings account at no extra cost
  • Easily connect your account to with QuickBooks

There are a few potential downsides to be aware of with Bank of America business checking accounts as well. First, you’ll need to have a minimum opening deposit of $100. With Business Fundamentals accounts, wire transfers also cost extra (between $15 to $40 each). Finally, if you don’t qualify for a fee waiver, those monthly account fees of $12 to $29.95 can add up over time — potentially as high as $359.40 per year. 

Chase was our best runner-up business checking account. 

Another great option that earns the runner-up spot from Nav for best business checking account is Chase. Like Bank of America, Chase’s Total Business Checking account does come with a fee ($15 in this case). However, customers can qualify for a fee waiver in a number of ways. 

Chase Total Business Checking account holders may enjoy the following perks: 

  • A reduced monthly fee of $12 by signing up for paperless statements
  • The potential to avoid the $15 monthly fee in one of two easy ways
  • Unlimited electronic deposits
  • Free ATM withdrawals at 16,000 ATMs
  • More than 5,000 branches available for convenient in-person banking and cash deposits
  • Access to both Chase Online Banking and Chase Mobile Banking

Of course, it’s not fair to talk about the benefits of a Chase business checking account without mentioning potential drawbacks. First, if you deposit more than $5,000 in cash per month, you’ll be charged extra fees. Also, despite having more than 5,000 branches available, there are areas where Chase branches aren’t as common. You should check online to see if there’s a Chase branch conveniently located near you if you’re considering the bank as an option. 

 

FAQ

What do I need to open a bank account for an LLC? 

If you’re interested in opening a new business bank account for an LLC, you’ll need the following two pieces of information. First, you will need your EIN number. Second, you’ll need to bring (or upload) a copy of your Articles of Organization. 

Can I use my personal bank account for my small business?

Technically, yes, you can use your personal bank account to operate your small business. However, if you choose to do so, you could open yourself up to some unnecessary risks and potential complications. 

When you use your personal bank account for business purposes, it’s difficult to separate personal and business expenses. This can be a difficult mess to try to untangle, especially when tax filing season approaches. Combining personal and business finances can sometimes lead to cash flow challenges as well.

Additionally, there may come a day when you want to establish credit for your business or apply for financing. If you run your business transactions through a personal checking account, your financing options can be very limited. According to Nav’s Annual Business Banking Survey, 70% of business owners who did not have a business bank account were turned down for a loan in the previous two years. 

Do I need a business bank account for a sole proprietorship? 

Technically, no. You do not have to have a separate business bank account if you are a sole proprietor. Yet just because it isn’t required doesn’t mean sole proprietorships wouldn’t be wise to open a dedicated business bank account anyway. 

As mentioned above, using your personal bank account for business purposes can be messy and cause problems. Plus, there are free business bank account options available, like Azio. We highly recommend opening a business bank account that’s completely separate from your personal funds. 

 

This article originally appeared on Nav.com and was re-purposed with their permission.

 

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.

Loans are subject to credit review. Additional documentation may be required for credit approval. Loans will be made or arranged pursuant to California Department of Corporations Finance Lenders License #6050609.

 

Opportunity Fund, the nation’s leading nonprofit small business lender, believes small dollar loans help hard-working entrepreneurs make lasting change in their own lives and build stronger communities by growing businesses and creating jobs. Opportunity Fund’s community of donors and investors is creating an inclusive financial system that empowers women, immigrant, and minority small business owners. Our strategy combines microloans for small business owners and New Markets Tax Credit investments in high-impact community infrastructure projects. Since 1994, Opportunity Fund has deployed more than $750 million and helped thousands of entrepreneurs invest in their families’ futures. The organization has committed to lending an additional $1.2 billion to small business owners across the country and investing $174 million in community real estate projects by 2023.

Visit us online at http://opportunityfundloan.org and follow us on Facebook and Twitter

September was Hispanic Heritage Month. Let’s keep it going! Here's a list of free and low- cost resources for hispanic entrepreneurs.

September was Hispanic Heritage Month. Let’s keep it going! Here’s a list of free and low- cost resources for hispanic entrepreneurs.

 

Minority Business Development Agency (MBDA)

What it costs: Free

What it does: “MBDA is an agency of the U.S. Department of Commerce that promotes the growth of minority-owned businesses through the mobilization and advancement of public and private sector programs, policy, and research. They work throughout the nation to link minority-owned businesses with the capital, contracts, and markets they need to grow. They also advocate for and promote minority-owned business with elected officials, policymakers, and business leaders. Serving as subject matter experts and advocates for the minority business community, MBDA conducts high-quality research and cultivates domestic and international relationships. Their programs and services better equip minority-owned firms to create jobs, build scale and capacity, increase revenues, and expand regionally, nationally, and internationally”

 

United States Hispanic Chamber of Commerce (USHCC)

What it costs: Free

What it does: “The USHCC actively promotes the economic growth, development and interests of more than 4.37 million Hispanic-owned businesses that, combined, contribute over $700 billion to the American economy every year. USHCC’s local chambers will have access to capital through grant programs, access to training, and a direct gateway to more than 260 corporate partners and Hispanic Business Enterprises. The USHCC National Convention is the largest networking venue for Hispanic businesses in America. It offers the opportunity to establish strategic long-lasting business partnerships through dialogue, networking, workshops, and more.”

 

Women’s Business Border Center (WBBC)

What it costs: Free

What it does: “WBBC provides information, training, individual technical assistance,and opportunities for women interested in starting or expanding their business. They create opportunities for women who want to access information, personal guidance and insight into business-management skills. The WBBC provides female business owners with numerous online sources to better assist with any and all questions about running a small business.”

 

Immigrant Business

What it costs: Free

What it does: “Immigrant Business was created to bring this ever-expanding, essential business community the tools needed to be successful in the United States. They cover inspiring success stories, political issues, and breaking news about immigrants and immigration, and offer first-hand tips on selling, franchising, winning government contracts, and much more from some of the most successful immigrant entrepreneurs in America.”

 

Immigrant Learning Center (ILC)

What it costs: Free

What it does: “ILC is a nonprofit organization that gives immigrants a voice in three ways: the English Language Program provides free, year-round English classes to immigrant and refugee adults in Greater Boston to help them become successful workers, parents and community members; the Public Education Institute informs Americans about the economic and social contributions of immigrants in our society; and the Institute for Immigration Research, a joint venture with George Mason University, conducts research on the economic contributions of immigrants.”

 

We’re always looking for the best affordable online resources, including tools to promote truckers and other small business owners like you. If you would like to share your small business success story or you have resources you have found helpful, please contact us at sblending@opportunityfund.org.

For information about Opportunity Fund’s small business loans, please contact us at 866-299-8173 or loans@opportunityfund.org.  For questions about your existing loan or other customer service questions, please contact us at 866-299-8173 or sbhelp@opportunityfund.org.

Loans are subject to credit review. Additional documentation may be required for credit approval. We are an Equal Opportunity Lender. Loans will be made or arranged pursuant to California Department of Corporations Finance Lenders License #6050609.

 

Opportunity Fund, the nation’s leading nonprofit small business lender, believes small dollar loans help hard-working entrepreneurs make lasting change in their own lives and build stronger communities by growing businesses and creating jobs. Opportunity Fund’s community of donors and investors is creating an inclusive financial system that empowers women, immigrant, and minority small business owners. Our strategy combines microloans for small business owners and New Markets Tax Credit investments in high-impact community infrastructure projects. Since 1994, Opportunity Fund has deployed more than $750 million and helped thousands of entrepreneurs invest in their families’ futures. The organization has committed to lending an additional $1.2 billion to small business owners across the country and investing $174 million in community real estate projects by 2023.

Visit us online at opportunityfundloan.org and follow us on Facebook  and Twitter

Opportunity Fund. Working Capital for Working People. opportunityfund.org