10 step complete guide for starting a consulting business from scratch.
Open a Business Bank Account
Be sure you find a strong banking partner.
Here’s what you need to know about business bank accounts for your new business.
Why you need a business bank account
Business bank accounts typically offer benefits that are not available in a personal bank account. For example, business bank accounts offer limited personal liability protection by keeping your business funds separate from your personal funds.
Additionally, banks that offer merchant services (allowing you to accept credit card payments) offer purchase protection for your customers and ensures that their personal information is secure.
By creating a business bank account, you’ll also create a great level of trust with your customers and prospects. Customers will be able to pay with credit cards and write checks to your business instead of directly to you.
And, many banks offer a line of credit, allowing you to take out loans on an as-needed basis. You can use such loans if there’s an emergency or if you need to buy new equipment or launch a new product or service line.
Finally, a business bank account helps you make large purchases and establishes a credit history for your business.
Community versus national banks
Many different financial institutions offer business checking accounts and business savings accounts for small businesses. These include big, national banks, local, regional banks, and online-only banks.
There are advantages and disadvantages to all. For example, business bank accounts from online banks are known for flexibility and limited fees. Business bank accounts from big, national banks are known for ATM and retail branch access.
For most businesses, the best banking partner is a smaller community bank. That’s because smaller community banks understand local market conditions and are built to service smaller businesses. You don’t want to be one of a million business customers with a major national bank – you won’t get their attention and will quickly get lost in the crowd. This is especially important if you want to build a close relationship with a bank.
Schedule meetings or calls with various banks and ask questions about ways they work with small businesses. These conversations will help you find the best bank for your new business.
Business checking and savings accounts
If you’re looking for a business bank account for your new business, focus on the business checking accounts. Business checking accounts allow you to manage your finances on a day-to-day basis.
But, if you’re looking for a way to store your business capital and earn interest on that capital, you’ll want to consider the best business savings accounts. But remember that savings accounts limit accessibility, so those types of accounts are not ideal for a new small business.
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