What Documents Do I Need to Open a Business Checking Account?

Before looking at what you need to open a business checking account, we have a few essential pieces of information to cover. Let’s start with the many benefits of having a business checking account:

  • Having a separate account for your business helps you better track your business expenses and keep more accurate books. 
  • Using a business account instead of a personal account makes your business look more professional to your customers.
  • A business bank account enables you to accept credit card payments. 
  • Many banks don’t allow you to use a personal bank account for business transactions.
  • Using a business bank account ensures that any limited liability you receive through the legal entity you’ve registered is valid.
  • It’s a good indicator to the IRS that your business is legitimate truly a business and not just a hobby to the IRS.

Types of business accounts 

There are a few different business accounts available. You can open a business checking account, a business savings account or a merchant services account

A checking account allows you to run your business, making and accepting payments and managing cash flow. 

When your business is more established, a savings account gives you a place to store money you don’t need for daily operations. Business savings are a great way to set aside money to invest in an upcoming campaign or project.

A merchant services account is needed if you accept credit card payments. Your merchant account is a business relationship with a merchant services provider, like a bank, who fronts monies for your sales in advance of customers paying their credit card companies. This enables your business to accept debit and credit cards, Apple Pay and other contactless payments, eCommerce transactions and more. You need to have a business checking account before opening a merchant account so that the merchant account provider has somewhere to deposit funds.

Look for low fees and good benefits when opening a business checking account

Finding the right small business checking account can be challenging. Many banks offer business accounts that seem to be more appropriate for larger businesses. For a small business, you don’t necessarily need all the features that a big business might be looking for. But you do need: 

  • Security: an FDIC-insured company to work with
  • Simplicity: quick access to key information about your checking account, plus easy-access debit card, mobile banking and online banking 
  • Good terms: no ATM fee, low or no monthly fees, no minimum opening deposit, no minimum balance and a high interest rate

If you’re opening a merchant services account, you’ll also want to pay attention to your discount rate, transaction fees and monthly minimum fees.

Information you’ll need when opening a business banking account

A lot of small business owners are nervous about opening a business account. They’re worried that they might not have all the documents they need or that it will take too long to find them. They may also be concerned that their business hasn’t yet brought in any revenue. The good news is that you don’t need to have any revenue, and you only need a few documents, to open a business checking account. The specific documents you need differ depending on whether you are a sole proprietor, a partnership, an LLC or a corporation.

Sole Proprietor Partnership LLC
  • Social security number (okay for sole proprietorships only) or EIN
  • Personal identification (passport or driver’s license)
  • Business license with the name of the business and the business owner’s name(s)
  • Certificate of assumed name/DBA
  • Monthly credit card revenue (for merchant accounts)
  • Employer identification number (EIN)
  • Personal identification
  • Business license
  • Certificate of assumed name/DBA
  • Partnership agreement with the name of the business and its partners
  • Organizing document filed with the state (for limited partnerships or limited liability partnerships)
  • Monthly credit card revenue (for merchant accounts)
  • EIN
  • Personal identification
  • Business license
  • Certificate of assumed name/DBA
  • LLC operating agreement with the name of the business and its partners
  • Articles of organization
  • Monthly credit card revenue (for merchant accounts)

Business checking on your terms 

Kabbage Checking™ gives you an easy, straightforward way to manage your money with an FDIC-insured business checking account. 

  • Get started in minutes, from any device: Creating your account is easy, and there’s no minimum deposit requirement. Plus, you can transfer money and make payments anytime, anywhere.
  • No monthly fee: You won’t have to pay monthly maintenance fees, meet any minimum transaction requirements or pay any minimum balance fees.
  • Great interest rate: We offer 1.10% annual percentage yield (APY), which is one of the best rates in the market. Please note that this rate may change, but we will always be competitive.
  • A new way to manage your money: Within your account, you can set up Reserves to organize your income streams and set aside money for specific goals.

Learn more about how Kabbage Checking can support your small business. 

Have questions about opening a business checking account? Check out our FAQs on this topic.

 

FAQs

What should I look for when opening a business checking account.

We recommend looking at the security of the bank (is it FDIC-insured), the simplicity (how easy is it to get access to your account), and the terms (are there a lot of fees).

Do I need to earn revenue before opening a business checking account?

No, you don’t.

Why is it beneficial to bank with Kabbage?

Kabbage has no fees, is easy to do business with, and offers an industry-leading annual percentage yield (APY) of 1.10%.

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