Accounts Needed For A Small Business – The best banks for small businesses all have one thing in common: They make it cheaper and easier to own and use a small business checking account.
So why are we investigating seven banks instead of one? Because the best checking account for you will depend on your needs. E-commerce stores vs. brick and mortar stores, sole proprietorships vs. multi-member LLCs.
Accounts Needed For A Small Business
First, we’ll look at the general-purpose banks that are best for small businesses, then narrow down the banks to meet more specific needs.
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Before choosing a bank, make sure you have all the documents you need; the bank will want to know more about your financial situation and will check your credit score. If you’re not sure if you’re ready to get started, check out our article on how to open a small business checking account.
For general small business banking, you don’t get much better than Chase. With a network of 5,000 physical branches and nearly 16,000 ATMs around the world, you can never be far from the bank. Additionally, their mobile app allows you to deposit checks, pay bills, make transfers and check your balance online.
A Chase business account is generally a good choice for most new small businesses; especially if depositing cash, free ATM access, or access to a real-world location is important to you. Chase is not a good choice if you plan on processing more than 200 transactions per month.
While Chase has a relatively low minimum balance, maintaining this minimum balance is the only way to avoid account maintenance fees. So if you expect your balance to drop below $1,500 on a regular basis, don’t choose Chase.
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If you plan to use a credit card for most business purchases, Chase is your best choice. It offers a variety of card options, very competitive interest rates, and points, cash back, and rewards programs.
Consumers credit unions are one of the easier credit unions to join. To become a member and account holder, you must:
Credit unions are unique financial institutions. They’re a non-profit organization (so the minimum deposit is low), and when you join, you’ll be entitled to vote in board elections.
While credit unions typically offer a limited selection of financial products, CCU has a wide range of loans to choose from. They also have a free Visa Business Platinum credit card that also offers business services. Checking accounts have significantly lower minimum monthly balances than most banks.
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If the credit union’s not-for-profit mission reflects your values, and you also want to take advantage of the low checking account minimums, CCU is a good choice. It’s easier to sign up, has lower fees, and offers more options than most credit unions.
On the other hand, if having lots of financing options and credit card options is important, and maintaining a high minimum balance isn’t an issue, you might be better off opening a bank account.
Most ecommerce small business owners handle all transactions digitally and get paid the same. In this case, having a live operating location that saves money may not be a priority. Enter online banking only.
Axos is the oldest and most established online bank in the United States. Basic business checking accounts have no minimum balance and offer a variety of loan options. Plus, while Axos has no physical locations, you can access your Axos checking account for free from any ATM in the US.
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If you run an online business, are already comfortable with online banking and want to process less than 200 transactions per month, then Axos is a smart choice. You don’t need to maintain a high minimum balance; this can be a relief when your business is just getting started and your cash flow is low. If your business needs funding in the future, you have many options.
Known for its loans, lines of credit and factoring services, BlueVine has expanded into the banking industry. This online-only account is easy to open; there are no minimum balance requirements or fees for incoming wire transfers, insufficient balance, or ACH payments. BlueVine Bank accounts also come with a debit card and free ATM access at MoneyPass ATMs.
Account holder fees to consider include cash deposits ($4.95 per deposit) and wire transfers ($15 per transfer). For businesses sending or processing funds overseas, these fees may be added.
If you’re a freelancer and need an account to collect payments online and help with your business expenses, then BlueVine is for you. This is a free bank account if you do not receive money or send money orders. Additionally, if you decide to expand your business in the future, BlueVine can help you secure a loan or line of credit for a quick infusion of capital.
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Based in Florida but serving clients nationwide, First Home Bank is routinely ranked as one of the top 10 most active SBA lenders in the country. It also offers a variety of other banking services for small businesses, including checking and savings accounts and non-SBA loans.
The SBA has designated First Home Bank as a preferred lender. So if you apply for an SBA loan through First Home, the approval process will be faster than anywhere else.
Newer businesses and start-ups need fast access to capital. If your top priority is getting your loan from an SBA loan as quickly as possible, First Home is the bank for you. However, if you want a business checking account or many real-world locations, or if small business lending isn’t your top priority, you’re better off taking your banking needs elsewhere.
Capital One is the only bank on this list that offers free unlimited transactions with no minimum account balance. It also offers five different small business credit cards.
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Does the thought of counting your monthly transactions to avoid fees make you shudder? If you live near a Capital One bank, process a high volume of transactions each month, and typically pay by card or wire transfer, then Capital One may be a good choice for your business. However, if your business is already established and you can easily maintain a minimum balance of $2,000, even better.
With 4,300 branches and 16,000 ATMs, Bank of America is everywhere. They also offer some of the best introductory deals for new business checking accounts. However, you won’t get unlimited free transactions like Chase, and there are limits to free cash deposits.
If you have easy access to Bank of America’s promotional offers and don’t expect to have a problem paying off your checks each month, opening a new business bank account could be a great way to make a little money while you’re a young business owner.
However, if you’re calling Bank of America primarily because your business costs a lot of money each month, consider the $7,500 free deposit limit and fees beyond that amount.
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Once you have a bank in mind, you can start preparing the documents needed to apply for a business bank account. When you’re ready to take the next step in separating your business and personal finances, find the small business credit card that best suits your needs.
This article is for informational purposes only and does not constitute legal, business or tax advice. Each should consult an attorney, business advisor or tax advisor regarding the matters mentioned in this article. No liability is assumed for transactions based on the information contained herein.
Get weekly training guides and curated resources from experts to help you make the right decisions to grow your business. No spam. Unsubscribe anytime. A Chart of Accounts (CoA) is a list of accounts that a company or organization uses to identify each type of commodity that is paid or received in cash or equivalents. A CoA is used to manage all transactions and separate expenses, revenue, assets and liabilities so that the company can have a clear picture of the financial health of the business. A well-designed CoA can improve a company’s ability to compare, understand, and focus on key business areas.
We often see small business owners mistakenly create a new account for each item they enter. This practice creates unnecessary holes (for example, an account that is active for one month but continues to show 0.00 the next month) and makes it more difficult to obtain important information needed to achieve business goals.
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For example, consider that a company sets up an expense account for loan payments, and this type of payment is actually contained in a liability account. Recording the payment as an expense to the company instead of reducing what is owed would be a costly mistake.
Whether we are performing a Quickbooks review or setting up our accounting services for a client, the CoA
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