RETURN to Small Business Resources
Opening a business bank account is one of the most important early steps for a small business—it keeps your finances clean, builds credibility, and makes taxes far easier. Here’s a clear, practical walkthrough:
1. Choose the Right Bank and Account Type
Start by comparing banks and credit unions (view Chamber member institutions here). Look at:
- Monthly fees (and how to avoid them)
- Minimum balance requirements
- Transaction limits
- Online/mobile banking features
- Lending options for future growth
Account types:
- Business checking (daily transactions)
- Business savings (reserve funds)
- Merchant services (to accept payments)
2. Get Your Required Documents Together
Banks will require documentation to verify your business. Typically, you’ll need:
For all businesses:
- Employer Identification Number (EIN) from Internal Revenue Service (or SSN for sole proprietors)
- Business formation documents (Articles of Organization/Incorporation)
- Business license (if applicable)
- Ownership agreements (like an Operating Agreement)
Plus:
- Government-issued ID (driver’s license or passport)
- Proof of address
3. Make Sure Your Business Is Registered
Before opening an account, your business should be legally set up in your state (like Ohio):
- Registered business name
- Approved business structure (LLC, corporation, sole proprietorship, etc.)
If you haven’t done this yet, most banks won’t proceed.
4. Apply for the Account
You can usually apply:
- Online (fastest for simple structures)
- In person (better for complex ownership or if you want guidance)
During the application, you’ll:
- Provide your documents
- List authorized signers
- Choose account features (debit card, checks, etc.)
5. Fund the Account
Most banks require an initial deposit (often $25–$100, but varies).
You can fund it via:
- Cash
- Check
- Transfer from a personal account
6. Set Up Account Access and Tools
Once approved:
- Enroll in online/mobile banking
- Set up alerts (low balance, large transactions)
- Connect accounting software (like QuickBooks)
- Order checks or debit cards if needed
7. Keep Personal and Business Finances Separate
This is critical. Mixing funds can:
- Complicate taxes
- Hurt your liability protection (especially for LLCs)
- Make bookkeeping messy
Always pay business expenses from your business account and pay yourself properly (owner draw or salary).
8. Build a Relationship with Your Bank
This matters more than people think. A good banking relationship can help you:
- Qualify for loans or lines of credit later
- Get better terms as you grow
- Access business advice and services
Pro Tip
If you plan to accept credit cards, ask about merchant services during setup—it’s easier to bundle everything at once than add it later.
