Considering opening up a business account? Many small business owners are finding that it is much better to have two separate accounts. Having one business account and one personal account can cut down on quite a bit of confusion. And it can also cut down on overspending.
Also, most customers feel a little more at ease when writing a check to a business than to a personal account. Looking professional at all times is one of the main traits that will help small businesses maintain and grow. Sometimes putting forth that extra effort is worth it!
There are a few things that a business owner may need to know prior to opening a business account. It will take a little more than a driver’s license and verification of residence. As a business owner, a certain amount of paperwork will be needed.
The registration of the business is only one piece of paperwork. Another item that will be needed is the employer identification number. This is called the EIN. Federal Tax Identification Number is what the EIN is known for.
In order to get an EIN, a business owner must apply for it. If an EIN application is done online the owner will receive his/her business EIN immediately. If it is done via mail or fax, it will take longer.
When it comes to the name that will be written on the checks, with a business account, it will be the name of the business. For first-time business owners, this can be a happy experience! Seeing their name on a book of business checks can be quite motivating, and many first-time business owners need every bit of motivation they can get!
Keep in mind when opening a business account, the maintenance fees may be higher than a personal account. So remember to keep a certain amount of money in the account. Speak with the bank representative and find out if there is a way to avoid some of the maintenance fees. For example, in some cases maintenance fees are reduced as long as a certain amount is kept in the account at all times. Find out what that amount is, then keep at it!
When searching for the best small business accounts look at everything when it comes to the bank itself. Is customer service in the bank excellent? Are they knowledgeable? If this is the owner’s first business checking account they may have quite a few questions, so choosing a bank with professional employees may be a good idea.
Besides customer service, the owner should be comfortable with the location of the bank. How far is the bank form your company, is it walking distance? Will the employees have a problem, when it comes to dropping off daily money bags.
Prior to making any decision, the business owner needs to know exactly what the service fees are, how and when will they be applied to the account. Compare the amount of maintenance and service fees to different banks. Decide if it is worth it to take a long drive to another bank in the next town. It may be that yes, it is worth it. If the fees at one bank are $20 and at another, they are $10, and the extra gas amounts to an extra $5, then yes, it may be worth the extra $5.
How different banks go about giving out loans? Finding out about this information could be crucial to your business. With one bank they may be very generous, but charge much higher interest rates and with another bank, they require the owner to be with the bank for a lot more time, and even then their practice is to loan out very little. However, their interest rates are around 5%.
Looking into all of these different issues matters, when it comes to making a decision. Does it take a little time, in an already hectic day? Yes. But it’s worth it, in the long run.
