How To Open a Business Bank Account in a Few Easy Steps

ByMilica Milenkovic
July 12,2022

Setting up a business can be a lengthy process filled with challenges and tough decisions. A business bank account is required for the majority of businesses, whether it’s a small business, a sole proprietorship, or a large corporation. However, before opening an account, there are some factors you should consider to ensure that you’ve picked the best option.

We’ll go over the benefits of having a business account, how to open a business bank account with the proper documentation, as well as how to pick the account and bank that will be tailored to your needs.

Benefits of Setting Up a Business Bank Account

A business bank account can facilitate your business ventures and is a requirement for some types of enterprises. Even if you’re a sole proprietor, having an account for your business offers a number of advantages that a personal bank account simply can’t provide.

You Can Separate Your Business and Personal Funds

Having separate accounts allows you to keep better track of your company’s financial records and income. Additionally, using a single account for your business and personal assets puts your personal savings at greater risk in case legal proceedings are initiated against your company. Therefore, it’s a wise decision to protect your personal savings by having an independent small business bank account.

You Can Accept Payments via Credit Cards

Accepting and processing credit or debit card transactions is not possible with a personal bank account. Sticking with personal accounts may limit your clients' payment options, as they will only be able to pay with checks or cash, which could be inconvenient for some. 

Others Can Access Your Business Funds

You probably won't be the only one who needs to use the company's funds. When you open a business banking account, you can give your employees access to it, allowing them to execute numerous financial transactions on the company's behalf. After all, using your personal bank accounts with your business partners and colleagues is inconvenient.

You Can Get Personalized Banking Assistance and Appear More Professional

Developing a business relationship with your bank ensures that you’ll receive personalized assistance in achieving your company objectives. You can obtain valuable financial guidance, and getting a line of credit or a loan will be a lot easier. Clients may also feel more comfortable making payments to a company rather than to you personally.

Decide on the Account Your Business Needs

Traditional and online banks provide a similar range of banking accounts, however, their specific services and rates may differ. The advantage of a traditional bank is that there are more products to choose from, and the customer service is better, while an online bank is more convenient for clients who prefer to do everything remotely. Your business might need more than one type of bank account, so let’s check out some of the most common options for opening business accounts.

Business Savings Account

If your company doesn't plan on spending the money immediately and would rather invest it in the future, a business savings account is the way to go. Over time, money in a savings account earns interest, however, those funds might be more difficult to access. 

Business Checking Account

Checking accounts are designed primarily for receiving and making payments. In this case, finding the right checking account for your small business is crucial. You also have the option of opening an online checking account if your business doesn’t plan on dealing with cash transactions.

Business Merchant Account

Merchant accounts are ideal if your business plans on accepting debit and credit card payments. They are a secure way for you to accept electronic payments. For this type of account, you must partner with a merchant acquiring bank, which acts as an intermediary when it comes to processing credit and debit card payments.

What Do You Need To Open a Business Bank Account?

Ensure you have all of the relevant documentation ready before deciding where to open your bank account. The documents you'll need will vary depending on the legal form of your business, and we'll go over some of the most common ones.

Your Personal ID

Every signer on a business bank account must submit their Social Security number and an ID document, such as a passport or driver's license, regardless of the business type. This step is the same as opening a personal bank account.

Social Security Number or Employer Identification Number 

Nowadays, the majority of banking institutions need business clients to supply their EIN to open a business savings or checking account. In order to apply for an EIN (if you don’t have one), you need to fill out an application form on the IRS website with a valid SSN. In some cases, sole proprietors are allowed to open a small business account using only their SSN.

Your Company’s Formation Documents

These documents should contain essential information about your business, like the name of the person in charge of financial management, the company’s structure, and how it will operate. For a corporation, articles of incorporation are necessary, whereas for an LLC, articles of organization are required.

Business Licenses

Before you can open a bank account for your business, the bank will request documentation that your company has all the necessary licenses to operate. Of course, the procedures for obtaining a business license differ by location, so it’s advisable to do some research before submitting your documents.

Monthly Credit Card Income

Businesses that need to process credit and debit card payments and transactions usually opt for merchant accounts. Accordingly, they need to provide the bank with their credit card revenue on a monthly basis. 

Choose the Right Banks for Business Accounts and Apply

After you've decided on the types of bank accounts that are suitable for your enterprise, you'll need to pick the right bank that will suit your business requirements. We’ll list some of the key factors you should consider before making a decision.


Business banking accounts usually come with monthly maintenance fees, ATM fees, cash deposit fees, and wire transfer fees. If you exceed your monthly transaction limit, you may also be charged per-transaction costs. These fees and their impact on your business are important factors to consider when choosing the bank.

Tools for Account Management

A good business account should allow you to make payments on the go, check your balance, and transfer funds from one account to another. All of this should be possible through a user-friendly smartphone app, an online account, or a third-party application provided by the bank of your choosing.

Interest Rates

If you opted for a business savings account, then interest rates are of primary importance. Certain business checking accounts also provide interest, so be sure to compare the rates and other criteria before making a commitment.

Variety of Bank Accounts

Not only do you need a bank that offers the business bank accounts you require right now, but you should anticipate the future requirements of your business as well. For example, make sure your bank offers lines of credit or a business credit card if you think you'll need them in the long run.

Branch and ATM Locations

As part of your preliminary research, you should look into each bank’s map of branch and ATM locations. Some may be closer to your area and therefore more convenient, so it's definitely worth exploring.

Deposit Your Funds and Start Banking

You're ready to open your company bank account now that you've chosen a bank and account type, and gathered all of the paperwork for your business entity. Applying for an account shouldn’t take long, and you can do it online in most cases. It’s a good idea to double-check all the information so you don't encounter any problems with the IRS or your bank afterwards.

Depositing money in your business banking account is the final step of this process. Usually, you’ll be asked for a minimum deposit, which can be made by submitting cash, transferring money from some other account to yours (via wire or electronic transfer), or by a check payable to your business.

Final Thoughts

If you’re planning to grow your business and turn it into a profitable venture, creating a business bank account will be a necessary step toward that goal. By describing the procedure in detail, we hope to have made the process of how to create a business bank account easier for you. It just requires you to take several factors into consideration, and opt for the one that is perfect for your business needs. As a result, you’ll be able to focus on your bread and butter, safe in the knowledge that your finances are in good hands.

Can I open a business bank account without an EIN?

Legally, you can open a business bank account without an EIN if your business is a sole proprietorship or a single-member LLC. However, since the majority of banks require you to have an EIN, you'll almost certainly require one at some point.

Can you open a business bank account online?

In most cases, opening a business account online is faster and easier than going to the bank and filling out an application in person. Completing and submitting your online form shouldn’t take longer than a few minutes, although that time may vary from bank to bank.

What documents are needed to open a business bank account?

The following are some of the most typical documents needed to open a new business bank account: 

  • Employer Identification Number or Social Security number
  • Personal identification documents
  • Business licenses
  • Ownership agreement
  • Monthly credit card revenues
  • Certificate of assumed name 
Is it hard to open a business bank account?

Although securing commercial lines of credit and financing for your business may be difficult in certain cases, opening a business bank account is relatively easy, given that you may open a basic account even with poor credit.

What is the easiest way to open a business account?

Learning how to open a business bank account is a simple and straightforward process, regardless of the type of business you own. First and foremost, you should carefully select a bank and account type, and gather all the documentation needed for your business entity. Once you’ve collected everything, you can set up the account online or in person. Finally, remember to double-check all of your information, as accuracy will save you time down the line.

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By Bojan Jovanovic · June 10,2022
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You should also be aware of the naming requirements applicable in your state. After you’ve confirmed the name’s availability, you can also conduct a quick web search to see if the URL is available and buy the domain name. After all, your business will likely need a website.  Step 2 - Ensure you fulfill the operating requirements After securing your DBA name, you may be required by your state to carry out business operations before proceeding with the registration process. Some examples of preliminary operations include printing branding materials like complimentary cards, staff identity cards (where necessary), and brochures. Step 3 - Complete the necessary forms  At this point, you’ll need to submit your proprietor information, including contact information, telephone numbers, and email addresses. This stage can be completed online. The completed forms can be handed back to the appropriate officer(s) in charge either online or via email. Whether approved or denied, you will be informed appropriately and this concludes the necessary steps to set up DBA. Other Things To Note About Filing a DBA 1. Restrictions on names Depending on your jurisdiction and the registration status of your main business, you may not be able to use certain words in the name of your DBA, including “Inc.” and “Corp.” at the end of the name. This will usually only apply if your business isn’t incorporated.  2. Announcement of your DBA When you start a business and need to find out how to get a DBA in your state, you may want to look out for requirements about announcing your trading name. Some states will ask that you announce your DBA in a local publication for a specific period. This is to create awareness that your legal business name and DBA belong to you and have been duly registered. 3. Certificate of good standing In some jurisdictions, you may be required to present a certificate of good standing from the office of the Secretary of State before your DBA registration can be accepted. This requirement is mostly for LLCs to show proof of the good standing of the business and its owner(s). 4. DBA renewals DBAs expire and need to be renewed after a certain period. In the majority of states, the lifespan of a DBA is five years. Take note of the registration date and the eventual expiry date to avoid any dramas. 5. Information change If the information you provided at the point of the DBA filing changes, your DBA may need to be revised. This can include changes to the structure of the business or to your principal address. 6. Employer Identification Number To protect your privacy and keep your personal and business matters separate, you’re advised to apply for an EIN. Having this number means you don’t need to use your Social Security number for your business identity. Advantages of Registering a DBA 1. Targeted branding When you need to branch out or focus on a certain aspect of your business, you may do so by getting a DBA registered and marketing it to your target audience. You’re at liberty to create separate logos, websites, and anything else related to branding to fit the description of what you’re registering as a DBA. This way, that aspect of the business can stand alone and have a more focused appeal. 2. Privacy protection Since the legal name of a business is usually the name of its owner(s), it makes sense to apply for a DBA. For some businesses, using a DBA ensures the protection of the owner’s privacy and reduces the number of unsolicited postcards and catalogs sent to your address. Privacy protection also helps reduce unsolicited calls, most of which probably aren’t from potential customers. Some of those calls may even be prank calls. You should consider creating a DBA if you don’t run a business that requires using your name to give you some form of leverage and boost personal branding. 3. Business flexibility For a business that already exists and is looking to expand, a DBA affords you the flexibility to do so while avoiding the need to register a new business entity. This flexibility even allows you to expand your business to a region where your legal business name has already been registered.  Flexibility also means that you can decide to use more fun and relatable names for your DBA. So if you haven’t already done so, the time to follow our guide on how to get a DBA is now! 4. Ease of legal compliance Fraudulent businesses and schemes can wreak havoc, and getting a DBA is the surest way to protect yourself and your business from avoidable legal issues. If you trade under another name in a state where you need a DBA but you haven’t done the paperwork, you’ll be in trouble.  The last thing you want is to end up defending a lawsuit that could have been avoided by filing the correct ‘doing business as’ paperwork. There’s no reason not to; it’s quick, easy, and not too expensive. Disadvantages of a DBA 1. Little or no liability protection Unlike registering certain types of businesses, getting a DBA doesn’t protect your assets from liability if your company gets hit with a lawsuit. The DBA does nothing to separate you from your business; it’s simply a legally recognized alias.  Of course, that’s not the purpose of a fictitious business name. Whether you’re opening an LLC or a corporation, you shouldn’t rely on your DBA for protection. 2. Maintenance difficulties Managing too many DBAs under one legal business entity can be a hassle, especially when you’re planning on doing business internationally. That’s because some other countries will also require you to file registration of trade name paperwork.  When you have to repeat that process for multiple DBAs across dozens of countries, then keep on top of renewals, there’s every chance some important admin could slip through the cracks and cause you some major headaches.  3. No extra tax benefits When you register a business name in the form of a DBA, you’re only getting an alias you can use for clearer branding. You shouldn’t expect the DBA to affect your company’s tax status - that all comes down to your business structure. 4. Lack of exclusivity of business names Seeing as a DBA is not a trademark, it doesn’t offer you exclusive rights to the name you have chosen; it only allows you to conduct business under that name. This means that multiple businesses can conduct business using the same or very similar DBAs. By extension, you can’t use DBAs for legal paperwork, since they aren’t legal entities. It should be noted, however, that you can trademark a business name if you desire some extra protection. Final Thoughts Registering a DBA is an easy and inexpensive way to expand your business and create brand awareness. It’s the best way for small businesses to experiment with other goods or services without having to break the bank or go through the process of registering a brand new business. At the same time, you can also enjoy the privacy a DBA affords you. Now that you know how to get a DBA, we encourage you to follow the steps discussed here and get one if your business needs it.
By Dragomir Simovic · June 10,2022
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You should explain your goal, what sets you apart from the competition, and what makes your business a good investment. Here are some of the particulars you should include in this segment of your business plan: Your business model Your business structure Your mission Your business history Business objectives Thorough information about your team and their salaries 3. Market Analysis Market analysis is one of the crucial parts of business plan writing. By conducting in-depth market research, you will get a better understanding of the current trends and the nature of your industry. It will also help you learn how to outshine the competition, which is extremely important, especially if you’re new in the business. One of the main questions you should answer in this part of your business plan is how big your target market is and how many people are interested in what you have to offer. That might sound overwhelming, but there are various sources you can consult.  You can do some academic research, check government statistics on particular demographics, or simply observe relevant news outlets. The more information you have, the easier it will be to make an informed decision. 4. Organization and Management This is the section in the business plan where you should describe the legal structure of your company. You should explain whether you’re running an S or C corporation, or if you’re operating as an LLC.  Furthermore, you should explain how your management team works and their roles and responsibilities. You should describe the hierarchy between all your team members and how each contributes to your vision. 5. Products and Services Your business plan should also have a dedicated section about your products and services. What exactly is your product? Who is it for? How much does it cost? Why is it better than what your competitors are offering? These are just some of the questions you should answer in this section. If you’re planning on adding some new products in the future, you should describe them as well and explain how they will contribute to your business. 6. Marketing and Sales To build a business plan, you need to define your marketing and sales strategy and how you plan to accomplish it. You should write about your sales process in detail and describe how you plan to attract and retain your customers. Of course, as the market conditions change, your marketing strategy will also change and evolve, and you can always adjust this part of your business plan accordingly. 7. Funding If your business needs funding, you should include that in your business plan. You should specify the type of funding and how much you need. You need to explain how you plan to use that capital, as that is the information your potential investors will be most interested in. Also, if you have any plans to sell the company at some point in the future, you should include that information as you write a business plan. 8. Financial Plan Having solid financial projections is probably the most important aspect of any business plan. Even if you have an excellent business idea and you’re invested in it, it won’t mean much unless you’ve figured out how to finance it. Each financial plan should feature a balance sheet, an income statement, and a cash-flow statement. A balance sheet gives an insight into how much equity you have in your business. Equity is the value the company’s shareholders would get if all of the company’s assets were liquidated and all its debts paid off. In plain terms, the balance sheet will show what you own vs. what you owe. The next segment your business plan should include is an income statement. An income statement is used to show a company’s financial performance over a given period of time. This statement includes all the necessary information about your company’s revenue, expenses, gains, and losses. So, whoever reads your business plan will be able to see how your business has performed in the past and whether or not it’s worth investing in. A cash-flow statement is similar to an income statement, but there are some differences. A cash-flow statement shows the source of cash but also helps track all ingoing and outgoing transactions. If the incoming cash is greater than the outgoing cash, your company has a positive cash flow.  And if it’s the other way around, your cash flow is negative, which can be a serious issue. According to some statistics, 82% of businesses fail because of cash flow problems, which is why you should regularly analyze your cash flow statements. Types of Business Plans Although there are some general guidelines, each business plan needs to be tailored according to your company’s needs and stage of development. With that being said, there are different kinds of business plans you can go for. The Operational Plan An operational plan is a plan that defines how each part of the team contributes to the company and its goals. It outlines the daily operations and tasks for over a year. A good operational plan ensures each manager and employee knows what’s required of them and understands their deadlines. Operational business plans are very important as they provide a roadmap for managing a business, but they can also be extremely helpful if you’re trying to get funding. They help assign human, physical, and financial resources, making it easier to reach your goals. The Strategic Plan The strategic plan is similar to the operation plan, with one major distinction. While an operational plan focuses on day-to-day operations, a strategic plan focuses on the company’s long-term goals and whatever is required to fulfill them. And while these are both action plans, a strategic plan heavily depends on an operating plan and its efficiency.  As a business owner, you need to ensure you have both operational and strategic plans in place, as that will make it much easier to achieve your business mission.  The Marketing Plan A marketing plan is another business plan example we cannot forget. It is a document that shows how you intend to promote and sell your products and services. It is an outline of your advertising strategy and all your promotional activities for a specific period of time.  Some of the key elements each marketing plan should cover include market research, marketing objectives and activities, the current business marketing positioning, marketing budget, and KPIs that should be tracked over time. Having good marketing can help you raise brand awareness, increase market share, and enter new niche markets. The Financial Plan Financial plans are another vital part of any business plan. As the name suggests, this document focuses on a company’s financial goals and the strategies it needs to employ to achieve them. A financial plan is especially important if you’re just starting a business, as it will show whether or not your business idea is profitable.  Each financial plan should include an investment budget, a financial budget, an operating budget, a cash-flow budget, and a personal expense budget. Once you have all this information in place, you should not have any trouble with your business planning and achieving your business goals. Just make sure to review your business plan periodically to see if it requires any adjustments. Final Thoughts As you can see, the process of writing a business plan isn’t as perplexing as it may seem at first, and the final product can be very beneficial to your business. By following the guidelines set in our article, you should be able to make a business plan outline and start developing your business strategy. All you have to do is define where your business currently is and where you want it to be in the future.
By Milica Milenkovic · December 23,2022

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