Credit & Checking Accounts

abundance-bank-banking-banknotes-259027This comes first in “Setting Up Shop” because you’ll want to pay for all of your business expenses out of these accounts. Shop around online at various banks and see what offerings there are for  business accounts and credit cards. Especially consider:

  1. the interest rate on the credit card
  2. the minimum balance required on the checking account
  3. transaction fees for certain types of deposits
  4. transaction fees for a certain volume of deposits per month
  5. mobile deposit limits

They might waive your interest for the first year of the credit card, but be wary of letting your startup expenses pile up on the card.

Setting up your new business account you’ll need:

  1. Proof of ID
  2. Your business registration with the state, although they may be willing to look it up online for you.
  3. Your business EIN
  4. A Banking Consent, to prove you have to right to bank on behalf of your business, although sometimes this is not required.
  5. A Banking Resolution, to prove it is the desire of the company to open the account, although this is sometimes not required.
  6. A check to capitalize the account. (They may also ask whether it is self-financed, financed by shares, financed by angel-investors, etc.)
  7. To choose your check design.

Remember to read everything carefully. Don’t be afraid to ask questions. Don’t put your signature on everything willy-nilly.

Then they’ll run your information through their very opaque software that will spit out what credit limit you qualify for. Everything will come in the mail shortly after, although they may offer to give you some temporary checks to get you started. You do want checks, even though it’s 2020. Some state business, like paying for certain licenses, is more easily done by a check in the mail, and some businesses and government agencies charge for paying by credit card.

Remember you’ll want to keep the business checking account capitalized both to avoid fees for that account and to be able to pay your business credit card and avoid interest payments. Your bank may view all of your accounts with them as one big pot, which may give you some incentive to have other accounts with them, since having more money in the bank will exempt you from certain fees.

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