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Guide

How to Open a Business Banking Account

As a business owner it's important to keep track of your finances and business records. We've got tips to help you by properly setting up your business bank account.

Running a business, especially a new one, is no easy task. Make your life easier by separating your business and personal financial accounts so you can manage daily transactions. This doesn't mean you should stroll into the next bank you see to trust them with your business finances, however. There are questions you should ask and factors to consider to ensure you're building a strong financial base for your business. Here are the 3 steps to opening a business banking account.
 

 

Step 1: Consider the Banking Costs

Several banks offer business checking accounts for free, with a minimum balance requirement and potential limitations to the amount of transactions allowed. Also consider that as your business grows, your banking needs may change. If your business has been benefitting from a free checking account, don't be afraid of moving up to an enhanced account that can handle more transactions. Increasing the cost of your banking can give you access to more bank services that may offset the increased cost of the account, plus allow you to more efficiently run your business.
 
Tip: Consider the entire banking relationship. It's not just about whether the account is free, or the amount of allowed deposits or the total monthly fees – it's about the whole picture. Create a pro/con list or spreadsheet to compare the banks you're deciding between.

 

 

Step 2: Choose a Bank That Fits Your Needs

Each business (and business owner) is different. They have different needs and require certain specialties from their bank. It's important to choose a bank that fits your business needs every step of the way. Keep in mind that it's easier to upgrade your business banking account within the same bank rather than changing banks entirely.
 
Research banks in your area to determine which ones specialize in working with small businesses, or if they have expertise working within your industry. Building a relationship with the personnel at your bank can also benefit your business if you're in need of another resource because they work with other businesses similar to yours. As your business grows, your bank should be able to add value by suggesting programs that can help you stay ahead.
 
Tip: Do your research and create a set of questions to ask each bank you're considering opening a business bank account with. While you can always change your mind down the road about your bank, it's easier to have all the essential information before signing up for an account.

 

 

Step 3: Gather the Necessary Documents

Depending on your business, the required documents needed to set up a business bank account will vary. Sole proprietors are often treated as consumers, so typically all you'll need are a tax ID and social security card. If you're doing business under a name other than your own, however, you'll need to register the name with the state and bring the form to your bank.
 
If your business is operating as a partnership, limited liability company (LLC), corporation or other separate legal entity, you'll need to bring the following documents in order to open your business checking account:

 

Partnership Agreement
Fictitious Name Certificate or Statement
Business License
Certificate of Limited Partnership
Articles of Organization
Certificate of Organization
Certificate of Formation
Articles of Incorporation
Certificate of Good Standing

 

 
It's also helpful to bring as much information as possible about expected financial transactions. Your bank will want to know the anticipated cash flow and credit needs of your business so they can make sure you choose the right business checking account.
 
Choosing the right business banking account can help build a strong financial base for the future. When signing up for an account, it's important to remember not only your current business needs, but your needs for the future as well. Talk to a financial professional about your business growth goals and what's needed to start your business bank account.

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

 

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