5 Unexpected Reasons to Open a Business Checking Account
If you have a business, you may have already opened a business checking account. This can be an effective tool to pay vendors and manage cash flow. Other benefits are having a business debit card and being able to access your account online. In addition to these banking services, there are more reasons to open a business checking account that people do not always consider. Here we look at five extra benefits to consider.
When you’re doing business with others, paying with a personal check or having customers write a check to you personally may make it seem like your business is just a hobby. Having a business checking account with your business name on your checks can lend credibility and will help you look more established in the eyes of your customers. It can also help enhance your legitimacy in the eyes of banks that you might need down the road for a business line of credit, loan or business credit card.
Another reason to open a business checking account is that it creates a distinction between your personal and business spending, which may make tax prep easier. Preparing for business taxes calls for accuracy in knowing the amount of money you are making, how you are spending your profits and how much it takes to run the business. This helps you determine and report how much of your spending can be deducted as a business expense. When finances are jumbled between personal and business spending, this accounting can be tedious and time consuming. But keeping separate records can help you stay organized and help save you money in the long run.
Business checking can also give you a barometer for how well your business is doing. Are you profitable? Was last month’s performance better or worse than the month before? And how are you tracking for the year? Maintaining a separate account gives you a much better handle on costs versus revenue.
The same reasons you may have registered your business as an LLC or corporation applies to business checking accounts: It can limit your personal liability and personal assets in the event your business falls on hard times. Having business funds tied up in your personal spending can put your personal accounts at risk.
Having a business checking account doesn’t impact your business credit score. But it does create a relationship with your bank and help establish your business. This can look favorable to credit bureaus which then may be more inclined to start a credit report for your business. This report will let financial institutions know that you are worthy of a loan. It also builds credibility with your own bank when you want to apply for a business credit card or a loan through them.
Taking the next step
Indeed, with these types of unexpected benefits a business checking account is a must-have, especially if your business is registered as an LLC or corporation, in which case you are legally required to keep finances separated. If you are the sole proprietor, it’s not required by law to have a business checking account, but it still is a good idea. Know that in either situation you do not have to show revenue to open an account. What you will need however is a state-issued ID, and your business tax identification number (TIN) or social security number, if you are the sole proprietor. You may also need a business license and articles of organization or articles of incorporation if you are an LLC or corporation. Requirements may be different at each financial institution.
How to evaluate a business checking account
As you look at M C Bank’s requirements, it’s the ideal time to review our business checking account options, keep in mind these key things to consider:
Convenience – physical branches or online banking. Also, remember that as a business owner, you are busy! Anything you can do to make financial management more streamlined and convenient, the better. If you like to bank in person, M C Bank has several physical branches in Southern Louisiana to serve you. If you prefer online banking, make sure the bank’s user interface, whether it’s via the M C Bank website or mobile app, is robust and easy to use. You will want to be able to check account balances, transfer funds and pay bills online. Other benefits that M C Bank offers are Business Mobile Capture and WebConnect interface for Quickbooks.
Opening deposit and minimum balance requirements. While you do not need to have any established revenue to open a business checking account, you do need the minimum opening deposit of $100 at M C Bank. In addition, M C Bank will require you to maintain a certain balance in your account every month or incur a service fee. Check with your banker to see what is required.
Debit cards. M C Bank does offer a Business Debit Card for business checking accounts.
Relationships: M C Bank prides itself on great relationships with our customers, it is our goal to be on a first-name basis with our customers. You can expect to receive the attention and respect you deserve and the helpful customized advice you seek.
It’s never too late to open a business checking account. By choosing the right one for you, you’ll be on your way to not only being able to manage cash flow, but also take advantages of benefits you may not have thought about. Contact M C Bank today to get started.