Are you ready to hang out your own shingle? Is your side gig gaining momentum? Before your time is eaten up with other business items, make sure you get your business banking in order.
Opening a business bank account is a crucial step to ensuring the success of your venture. It helps you separate personal and business finances, improve your company's credibility, build a strong credit history and open up new opportunities for business growth.
The following are key steps to setting up your business account:
- Find Out If You Need an EIN
The Employer Identification Number (EIN) is a unique identification number assigned to businesses by the Internal Revenue Service (IRS).
EINs are typically required to open a business bank account. Some businesses – like sole proprietorships or single member LLCs – may be able to open a business banking account without an EIN. However, obtaining an EIN is free and simple, so you might decide to go ahead and secure your EIN.
Apply for an EIN online through the IRS website.
- Gather Your Documents
Before you start the application process, be sure to have all the necessary documents ready. These documents typically include:
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- Business registration documents (typically filed with the Secretary of State where your company originated)
- Tax Identification Number (EIN)
- Other relevant identification documents
- Some of those documents will help to confirm your identification (including your social security number and photo identification such as a valid driver’s license or passport).
- Some of these documents will be business oriented. They might include a URL to the company website or print materials you distribute to customers, business licenses and any partnership agreements.
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Preparation will make the process faster and simpler.
- Consider Where to Bank Your Business
One of the most common mistakes first-time entrepreneurs make is assuming the bank they use for personal banking is the right fit for their business. Many small business owners have learned the hard way to seek out a bank that specializes in small business banking.
Community banks, like Heritage Bank, are often recommended by entrepreneur mentors and small business advisors. These institutions are generally locally owned and operated, so they focus on customer service and exercise more flexibility when helping a customer obtain bank products or credit. They can often move faster and consider more than an algorithm when a customer applies for a business credit card or loan.
- Look for a Banker, Not Just a Bank
In addition to setting up accounts and considering other business banking services, now is the time to start building a relationship with a banker. The right banker can recommend resources in your community for building a business plan, obtaining legal advice or identifying the right accountant. They can even introduce you to potential mentors or recommend you to other customers with services that will benefit your business. Heritage Bankers are so vested in the success of their business customers, they've been asked to be Godparents and speak at family weddings.
- Choose the Right Account
Each bank offers different types of business accounts and lending options, so take time to review and select the one that best suits your business' needs. Consider factors such as fees, interest rates and account features that might benefit you now or in the future before selecting the right account.
You might also consider whether the bankers you interact with take the time to understand your business and offer suggestions about accounts and other services to consider. If you are left to sort through unfamiliar information and make decisions on your own, you might reconsider where you open a business account.
- Better to Apply in Person
Although some banks allow businesses in some jurisdictions to open business accounts online or to submit account application materials for review through a portal, consider visiting the bank in person.
Scheduling an appointment with your local branch will allow you to learn more about everything your bank offers – including digital banking. You might also learn about current specials and cash management services you had not considered applying to your business.
When applying for a business bank account, you'll need to provide your business name, address and the type of business. You'll also need to provide information about the account signatories and the purpose of the account. Just answer honestly.
After submitting your application, the bank will review and inform you of its approval status. The approval process can take anywhere from a few days to a few weeks, depending on the complexity of your application.
Open Your Business Bank Account with Heritage Bank
When it comes to managing your business finances, opening an account with our community bank is an excellent choice. With our banking services, you can experience a more flexible, personalized approach that helps you manage cash flow, make secure transactions, apply for credit cards and other lending options, and so much more.
You'll also have access to our team of experienced bankers who can provide the guidance and support you need.
Join us today and take advantage of the countless benefits that come from banking with Heritage Bank.
