Hope Stories Bank of Hope Tori Dunlap Sep 25, 2020

Congrats! If you’re reading this, it’s either because you’ve decided to enter the wonderful world of entrepreneurship by starting your own business or you are thinking about it, which is just as exciting. Becoming an entrepreneur is one of the hardest, most rewarding things you will ever do. Nothing will empower you like being your own boss.

Becoming an entrepreneur comes with a long list of tasks, but my hope is that with this blog post, I’ll be able to at least take one thing off your plate: opening a business checking account.

While you don’t necessarily need to be making money in order to open a business bank account, there are some things you should make sure you address beforehand. We’ll be covering exactly what those are in this post, and then be talking about the different types of business checking accounts that Bank of Hope offers so you can find the perfect one for you!

Ready to Open a Business Checking Account?

 

Tips for Opening a Business Checking Account

 

 1. Pay close attention to the cost/benefits of each bank

Unlike personal checking accounts which are usually free or inexpensive, business accounts usually come with a monthly fee. However, it is becoming increasingly common for banks to offer cheap accounts for small businesses as a way for them to more easily establish themselves when first starting out.

Here’s a list of things to compare when researching business checking accounts

1. Sign-up bonuses
2. If there are fees for closing the account early
3. Interest rates for both checking and savings accounts
4. How high the transaction fees are
5. If fees are waived if a minimum balance is maintained

In addition, it’s smart not to assume that your personal bank also has business accounts. Do your research and see what your options are. Carefully compare banks and list out the pros and cons of each. My personal recommendation would be Bank of Hope— an established and reliable company with four different business checking accounts, which we will go over in a bit.

 

2. Collect all necessary business paperwork when opening the checking account

After establishing which bank works best for your business needs, it’s time to open a checking account! 

Here’s a list of the paperwork you will need to get started. However, I want to say this is the minimum that will be required of you. Depending on your bank, you may need more specific documents. I recommend contacting your bank beforehand for the latest and most accurate information.

1. A tax ID number (e.g. Employer Identification Number (EIN) for the business)

You can visit the IRS to apply for an EIN for free.

2. A business license or business name filing paperwork

This looks like calling your state and local government office to talk through what the process looks like for obtaining a license. It usually involves some paperwork and a small fee. For more info on how to register your business, click here.

3. Your social security number

This is especially important if you are a sole proprietor— which means you are “solopreneur” and are owning and running this thing yourself.

4. Business Formation Document

This is a legal document and license that allows you to form and operate a business.

 

3. Go ahead and register your business name beforehand.

It may be a smart idea to open up your business account in the name of your business rather than your personal name. However, ultimately the choice is up to you.

First, check and see if your business name is taken by searching the trademark database. If you can’t find it, you’re in luck!

Next, there are four main ways of securing and protecting your business name. For more information on which may pertain to your business, click here.

YAY! You’re all set to open a business checking account!

 

Understanding Your Business Checking Account Options

 

The next question you might be wondering is… which type of account is right for me?

I’ll be going over the four different types of business checking accounts that Bank of Hope specifically offers, so you find the right one to fit your needs.

1. Regular Checking

This type of checking account is great for those everyday tasks you need to perform as a business. Some of the highlights include a low initial deposit and the ability to write unlimited checks (fees apply).

2. Econo Checking

Are you a new business that’s just starting out? This may be the perfect fit for you. Bank of Hope offers this low initial deposit and low monthly service charge account for businesses requiring little banking activity.

3. Interest Checking

If you have the goal of earning interest for your business, Bank of Hope offers this account with unlimited check writing (fees apply). You can view the current interest rates on their website.

4. Analysis Checking

This type of checking account is perfect for established businesses that will have a lot of bank activity. Bank of Hope keeps the opening deposit low while also providing analyzed monthly statements.

5. Choice Checking

Ideal for companies who conduct tranastions semi-frequently, this business checking account's primary differentiator is its added Treasury Management services. Plus, it charges no fees for the first 300 transactions.

6. Premier Checking

The name says it all. On top of offering business checking account services like Treasury Management, it charges no fees for the first 500 transactions. 

Curious about other business financial services which are available at Bank of Hope? Popular offerings include (but aren't limited to): 

 

Frequently Asked Questions About Business Checking Accounts

 

1. Am I Legally Required to Open a Business Checking Account?

Sole proprietors (one-person operations) are not mandated to open banking accounts specifically for their business. Nonetheless, it's still a wise move, as we'll explain further below.

Companies with more than one team member are legally required to establish a designated banking account for their finances, as the partnership or corporation is considered to be its own entity.

 

2. Why should a small operation consider a business checking account rather than a personal account?

When reading that business checking accounts come with added fees, it's natural to question whether you should open a personal account instead. Keep the following in mind:

  • Having a business checking account safeguards your personal money. An unfortunate truth about running a company is that there will be plenty of curveballs sent your way. If you ever face a lawsuit or bankruptcy, a business checking account helps establish what belongs to the organization and what belongs to you as an individual.
  • Having a business checking account makes day-to-day financial exchanges easier. These include writing checks on behalf of your company (rather than yourself), distributing debit cards to employees, and transferring larger sums of money via wire transfer.
  • A designated business checking account leads to easier taxes. Having a checking account set up specifically for your business will make taxes infinitely easier, even if you’re a sole proprietor. You’ll be able to accurately identify business expenses to write off. Plus, if you’re ever audited, the account you use for your company’s financing will be thoroughly reviewed, giving an additional reason to keep business checking separate from your personal.
  • A business checking account is foundational to future growth. If you have a hobby from which you occasionally make money, you may be able to get away with using a personal checking account for your business’s finances. But what happens if you want to grow that passion into a multi-person operation? A business checking account helps establish your company’s financial footprint and nurture a relationship with your bank’s business division. In turn, it may be easier to qualify for related services like credit cards and commercial lending.
  • It can help you sell your business in the future. Most prospective buyers will perform due diligence to determine the potential for profitability from your company. Having a business checking account enables you to arm them with all the necessary information including financial statements that shows exactly how much was earned versus spent.

 

3. Is there a minimum amount for opening up a business checking account?

The specific minimum will vary from one bank to the next. However, as a reference point, Bank of Hope offers business checking accounts with a threshold as low as $100 (most other accounts require at least $1,000).

 

4. Can I update an existing Bank of Hope business checking account to a different type?

Let's say you currently have our Analysis business checking account and want to switch to our Regular or Premier options. That's no problem! We recommend making an appointment at your closest Bank of Hope branch where a team member can assist with the transition.


I hope this post comes in handy when it comes to opening a business checking account! I am so thrilled that you have chosen to enter the world of entrepreneurship and/or starting your own business. As always, I only work with brands I full-heartedly believe in, and all opinions are my own.

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This article was written by Tori Dunlap, founder of herfirst100k. 

The views and opinions expressed in this article do not necessarily represent the views and opinions of Bank of Hope. 

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