Open a bank account for your new business

Do you really need this?

Oné of the first ques­tions a new busi­ness owner asks is does he need a bank account in the name of his new com­pany. Sole pro­pri­etors espe­cially feel they can use per­sonal check­ing and even sav­ings accounts and skip the extra paper work and has­sle. Well, what I call extra paper work and has­sles is try­ing to explain to the IRS or my tax accoun­tant why I didn’t get a busi­ness bank account. Yes, in my opin­ion, you do have to have sep­a­rate accounts. The costs of not doing so can add up.

Hav­ing a busi­ness bank account starts your busi­ness off on the right foot by:

• con­vey­ing cred­i­bil­ity with both cus­tomers and poten­tial creditors,
• sep­a­rat­ing busi­ness from per­sonal expenses and income,
• get­ting your new business’s record keep­ing off to a good start.

Banks require­ments for open­ing a busi­ness account vary widely. Some are more small-​business friendly than oth­ers. While you will often find the best “deal” from the bank where you have already estab­lished a good rela­tion­ship, it’s pru­dent to com­pare what a few dif­fer­ent banks require; some banks’ require­ments are fairly sim­ple whereas some banks are extremely com­plex. Sim­ple or com­plex, their require­ments are likely to dif­fer from your per­sonal accounts.

To help you start com­par­ing bank pro­ce­dures, ser­vices and require­ments for busi­ness accounts, the links below will take you to a few some major banks. Bank require­ments also dif­fer by state so you’ll need to refine your search when you reach these sites:

• Bank of Amer­ica (in California)
• Chase Bank
• Citi Bank small busi­ness ser­vices overview
• Wells Fargo

Remem­ber to look also at local banks and credit unions in your area. Note the above links are not enforce­ments of any bank or its ser­vices and is included strictly for your use in gath­er­ing gen­eral information.

Tips:

A busi­ness credit card can be obtained under your credit scores. It will help to sep­a­rate your expenses from your per­sonal expenses buy any­thing business-​related. Your year-​end sum­mary will help sort your receipts at tax time as well.

Even if you do not need a busi­ness loan now, you may later. As your busi­ness grows (be opti­mistic, now) a busi­ness loan may be a smart invest­ment. Now is the best time to estab­lish a good rela­tion­ship with a bank that can pro­vide the loan you may need down the line.