6 Easy Steps to Opening a Business Bank Account

Opening a business bank account can seem complicated and confusing, but it doesn’t have to be. In many ways, opening a business bank account resembles the same process as opening an individual or personal bank account.

The key difference lies in the type of information you need to provide, along with some additional steps you might have to take based on your business’s unique needs. Still confused? Read on for our six easy steps to opening your business bank account.

1) Decide On Your Business Structure, So You Know Whether Or Not You Need an EIN(Employer Identification Number)

If you plan on hiring employees in your business, you will likely need an EIN. An Employer Identification Number (EIN) is essential for tax reporting purposes by employers and sole proprietors of businesses.

2) Locate Banks in Your Area That Have Small Business Lending Programs

Research which banks in your area are most likely to approve your application. Call each bank and ask questions about their programs and find out how many businesses they’ve approved in the past year, etc. It’s important that you call multiple banks so you can get an accurate picture of the requirements for approval.

Business acquisition financing is money you can borrow to start or buy a business. It’s different from personal financing, which you might use to buy a car or house. You might use a business acquisition loan to purchase inventory, fund an expansion, remodel your space, or pay any other expenses associated with starting or buying a business.

According to Lantern Credit, “Taking out a business acquisition loan allows a borrower to finance the purchase of an existing business. An acquisition loan can be used to obtain a standalone business, purchase a franchise, or buy out partners in your current business. While requirements vary by lender and situation, both new entrepreneurs and existing business owners can usually find options to apply for.”

3) Gather Up All Documents Required by Your Bank: Proof of Address, References, Resume, and Financial History Documents

Your bank will require some personal information, including your name, address, and contact details. They’ll also need information about your business such as its name, purpose, and tax ID. To complete your application, be sure to bring copies of any documents that verify any financial information or other details you provide.

4) Get your Employer Identification Number (EIN)

The Employer Identification Number (EIN) is assigned by the IRS to identify your business. It’s on all tax returns and 1099s, as well as W-9s.

5) Set Up a New Checking Account

As you start your business bank account, you must do so with your Employer Identification Number (EIN). Doing so will help ensure that your business information stays separate from personal information. If you don’t have an EIN yet, it is possible to set up your new checking account without one – just make sure you keep track of all transactions and pay for any tax penalties later on.

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6) Open an Investment Account

When you open an investment account, some banks will need your EIN. If you start your business as a sole proprietorship (or DBA), all you need is an SSN. But if you are starting as a corporation, limited liability company (LLC), or other business entity, be sure to have an EIN before opening your bank account. An EIN is used for tax purposes and identifying your company’s financial records. You can apply for one online in just minutes.

Conclusion

Before you open your business bank account, make sure you have all of your legal documents in order with a detailed business plan that includes financial projections. These things will make getting your bank account opened more quickly and less hassle.