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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 have tips to help you properly set up your business bank account.

Running a business is no small task. Make your life easier by separating your business and personal financial accounts so you can better manage daily transactions. 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 three steps to opening a business banking account.

Step 1: Consider Your Banking Needs

Fortunately, there are multiple different types of business checking accounts so you can find one that meets your specific needs. Many banks offer business checking accounts with a minimum balance requirement and potential limitations to the amount of transactions allowed.

Consider that as your business grows, your banking needs may change. If your business has been benefitting from a basic, no-frills checking account, don't be afraid of moving up to an enhanced account that can handle more transactions. Spending slightly more on your business checking account 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 what the checking account will cost or the amount of transactions allowed – it's about the whole picture.

Step 2: Choose a Bank That Provides Value

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, not just for today. 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 your type of business, or if they have experience working with other companies within your industry. Building a relationship with your bank can also benefit your business since a bank you've worked with closely will better understand your business needs and can pull from their experience working with clients both in and outside your particular industry. As your business grows, your bank should be able to add value by suggesting products and services that can help you stay ahead.

Tip: Do your research and create a set of questions to ask each bank with which you're considering opening a business bank account. It is beneficial 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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