Getting a Business Bank Account - Paper and Spark (2024)

FAQs

What is required to open a business bank account? ›

An EIN (Employer Identification Number) is a unique nine-digit number the IRS uses to identify your business for tax reporting purposes. Unless you're a sole proprietor or single-member LLC, you'll need an EIN if you want to open a business bank account.

Your Social Security number. A valid, government-issued photo ID like a driver's license, passport or state or military ID. A minimum opening deposit of $25 to activate your account (once you've been approved).

No, you cannot open a business bank account with an employer identification number (EIN) only. You'll also probably need other business paperwork — like your business license and formation documents — plus personal identification like a driver's license.

Keep a close eye on both your personal and business credit reports. A business account can be denied because one of the people on the account has poor credit or a history of checking account issues.

Opening a business bank account for your LLC doesn't just help streamline bookkeeping and operations (though it does that, too). A dedicated LLC bank account is an essential step to maintaining the legal distinction between the business and its owners, which is necessary to preserve limited liability protections.

Application Declines Can Stem from Bad Credit, Tax Liens, Prohibited Business Types and More. Applying for a merchant account can be an intimidating process, especially if it is your first time in the marketplace.

Does a small company that operates as a sole proprietorship need an employer identification number (EIN)? A sole proprietor without employees who isn't required to file any excise tax return and hasn't established a pension, profit-sharing, or retirement plan doesn't need an EIN (but can get one).

You don't need a good credit score to open a business account, but banks will check your ChexSystems report to assess your banking history. If you've overdrawn on your balance in past bank accounts, have unpaid bank fees, or have had an involuntary bank account closure, new banks may deny you an account.

How much does it cost to open a business account? ›

Most business bank accounts can be opened with $0, but some business checking accounts require an opening deposit, which typically ranges from $25 to $100.

Like personal checking accounts, many business checking accounts require a minimum deposit to open. That amount will vary by bank. At Wells Fargo, for example, you only need $25 to open a business account, while U.S. Bank requires a minimum deposit of $100.

How long does it take to open a business bank account? Provided you have all your paperwork in order and good financial standing and credit history, you could get approved to open a business bank account same-day (if going to the bank in person) or in as little as 10 minutes when doing it through online banking.

Here's what you'll need to open a bank account online or in person: a government-issued ID, personal details such as your Social Security number, and a way to fund your new account with an initial deposit. What banks allow you to open an account online?

Can I start a bank with no money? In theory, yes, but you'd better have friends with deep pockets and in high places. Because of the lofty capitalization requirements, most banks are formed as corporations run by a board of directors, whose investors are often local business or community leaders.

Most business bank accounts can be opened with $0, but some business checking accounts require an opening deposit, which typically ranges from $25 to $100.

If you have set your business up as a limited company then you must use a business bank account to run it. While sole traders are not legally required to set up a business account, it can be a useful way to keep your business and personal finances separate and access support to help your business thrive.

Banks will also require you to submit your business's name, address, an employer identification number (EIN), and any documentation to support the fact that your company is legitimate and you are the owner. Some institutions may require deposits to open business bank accounts, but often that fee can be $100 or less.