When you have a new business, it may be hard to find banks accepting new business accounts. After all, banks are looking for history - for proof that you've handled an account before and that you will not be a liability to them. If they cannot see a banking history attached to your name, they will be less inclined to offer you a business bank account.
That being said, this mostly applies to big banks and maybe the interest-bearing ones. There are still certain banks out there that allow small business owners to start up a new bank account.
You just need to know exactly what you are looking for in the account. Once you narrow down your needs and your possibilities, you may settle on one business checking account for your small business.
Note: if you want to open a new bank account easily for your business, try Bonsai Cash. Our account has no hidden fees or minimums and does not require a credit check to open (so it is virtually guaranteed). You'd also be able to instantly create "envelopes" or sub-accounts to save for taxes, retirement or vacations. Open an account today.
All business checking accounts will require fees to some extent. Some have costs associated to opening a new business bank account and some have no fees. This is why you need to read every contract or fine print carefully before you sign it, as there may be some hidden fees you need to know about.
Many banks accepting new business checking accounts will allow free cash withdrawals from the ATMs in your network. Even if you do withdraw cash from another ATM, the money will be withdrawn from another account.
However, other banks will either charge a fee or not reimburse the money. This is why, when you open a business checking account, you need to know how your ATM withdrawals will be charged - especially if you withdraw money on a frequent basis.
Most business checking accounts will offer a certain number of free transactions - the number mainly depends on the business banking option that you go for. Fees are relatively small, from $0.10 to $0.50, but if you are planning to make multiple monthly transactions, you need to know your limit.
You may want to go for a business checking account that offers unlimited transactions to remove this potential problem. This way, you won't have to worry about paying an excess transaction fee when there is no limit, to begin with.
When you don't have enough money in your business checking account, most banks will simply deny your transactions on the grounds of insufficient funds. However, other banks will simply send you a negative balance and charge an overdraft fee.
In case you expect to make purchases more than what your account can cover, you'll want to know what the overdraft fee is. This way, you won't end up in bigger debt with the bank simply because of a checking account.
Some business bank accounts will charge a monthly service fee, especially if it is the kind of checking account that bears interest. Often, this fee is waived, as long as you meet a minimum balance requirement. This amount varies by bank, so you'll want to do your research. Some banks have no minimum business checking accounts available.
Depending on the business checking account that you are going for, you may or may not be charged a fee for cash deposits. The bank itself will decide what the cash deposit fee will be per transaction, so you need to read the fine print for your business bank account.
Brick and mortar banks will typically charge a fee for sending you paper statements in your mail. The fee will depend on the financial institution that you are going for. To protect yourself from this fee, you may want to choose electronic statements for your business banking process.
If you get a business checking account and you decide to close it within the first few months, the bank may charge an early account closing fee. For this reason, you should do your research properly so that you choose a business bank account you'll end up using.
Even if you aren't certain, you should at least know what these fees are. This way, you will prevent any unpleasant surprises.
Some banks may charge an ACH or wire transfer fees, although the amount may vary from one bank to the other. Make sure that you familiarize yourself with these fees before you get a business checking account.
As a business person, you will have various needs for your small business. So, when you choose your business banking account, you must make sure that it caters to these needs - whether they are present or future needs.
When researching the features of a bank, you need to consider the growth potential of your business. Otherwise, if your business grows and your bank cannot handle your requirements, you'll be forced into opening accounts at multiple banks.
Instead of overcomplicating your future that way, you may want to choose a bank account that can accommodate growth. This way, even if you do have to upgrade your account, at least you will not have to look anywhere else.
Here are some of the features that you should keep in mind when you choose a business bank account for your small business.
When you use business checking accounts, you will definitely need a business debit card in order to make purchases and payments. Nowadays, it's much easier to make payments with a credit card than simply using cash.
Depending on the number of employees or partners that you have, you may want to go for a business that offers joint business checking accounts with multiple debit cards. You could even open a business account without your partner.
Business credit cards are quite useful for new businesses, especially if you have a lot of payments to make and you don't get the same amount of income every day.
Credit cards can help you cover your expenses so that you are never late in your payments. These days, many vendors and suppliers accept credit card payments, so this may come to your advantage.
Depending on the small business checking accounts that you go for, you may get a lot of perks. Not only will this improve your business credit, but you can also get extras such as cashback or travel rewards.
While it's perfectly fine to get business credit cards from a different bank that you are using, it might be easier for you to keep your finances in the same place. Plus, if you are thorough with your payments, it will help improve your overall relationship with the bank.
If your business is still growing, then you may want to look for a bank that can also provide business loans whenever you need them. For instance, not every bank in the state offers California finance lender loans, so if that's your purpose, then you should be thorough with your research.
Many banks will offer you business loans, as long as you maintain a business savings account. This helps establish a relationship, and they will be more than likely to offer you their services. Therefore, before creating a new account, make sure that they have interest-bearing accounts as well.
The most convenient place for where to open a business bank account is online. If you want to save time through online bill pay, then you may want to go for online and mobile banking. There are various banks that offer Internet banking and mobile apps so that you may conduct your business from wherever you may be.
An online account will not only be useful for bill payments, but also for other transactions. For instance, you may use it to make online check deposits or check the balance of your business bank accounts when making a transaction.
For example, most of the transactions on Bonsai Cash are made online. This way, you will not have to make constant trips to the bank location, wasting precious time on transit and waiting in lines.
Some small business owners like the benefit of having a physical branch to go to. If that's important to you, a brick-and-mortar bank might be more convenient than an online business checking account.
Having a physical branch to go to gives you the option of easily making cash deposits. You should also look for the locations of their ATMs and make sure they are not too far from where you are doing business.
Aside from the banking platforms and standard features, there are other factors that you should keep in mind when opening a new business checking account. These can include:
Once you open a business checking account, you may be interested in opening some savings accounts or even some joint accounts as well. Look at the overall types of accounts provided by the bank, in case you wish to open multiple business banking accounts.
Typically, the best business checking accounts will require a monthly balance, especially when it comes to new businesses. The problem is that not every business has that kind of capital, so you may want to look for a checking account with no minimum balance needed.
Bank accounts such as Bonsai Cash or the Chase business complete checking account don't require a minimum balance, but this is recommended if you want to reap certain benefits (such as waiving your monthly service fee). You might want to do some research on the fine prints for these advantages.
As a business owner, you can't afford to put your money at risk. Look for banks that offer Federal Deposit Insurance Corporation (FDIC) Insurance. You should be able to find on their platform information on whether they are FDIC members or not.
There are plenty of banks out there that offer a business account to new business owners. Depending on your situation, like if you freelance or if you are opening a business bank account for an eCommerce store, you'd want to compare each institution to meet your needs. Let's dive into a few examples:
If you are a small business owner or freelancer looking for a business checking account, then you may want to consider giving Bonsai Cash a try. For the most part, this is a free business checking account, as it requires no monthly maintenance fee, no transaction fees, and there are no penalties for not meeting a minimum balance.
This online and mobile banking solution allows you to easily see the available balance in your checking account and offers both virtual and physical debit cards.
Bonsai has the "Envelopes" feature that may double as a savings account, and you may create as many envelopes as you like. Envelopes are like sub-accounts for your business account that you can create instantly. The app is for the most part automated, making it the best business checking account for busy small business owners. Open an account today.
The Chase business complete checking account offers various benefits, but the advantages of the credit card programs are the most attractive. Aside from the co-branded cards, you also get rewards points and significant cashback.
The Chase business checking account comes with three options. You have their basic business checking account, but you also have the Performance and Platinum business checking accounts.
There is no cash deposit processing fee if you deposit up to $5,000 every month; from that point upward, you'll be charged a fee. There is a $12 monthly service fee, but it may be waived with a $1,500 balance.
With the Chase business complete checking account, you also get easy access to mobile banking, so that you may perform business transactions on the go.
If you want your business savings account and checking account to earn interest, then BlueVine may be what you are looking for. With an APR on balances up to $1oo,000, you may actually earn interest not only on the savings accounts but also on the checking accounts.
You don't need a minimum balance to open a business checking account, and you have no monthly service fee to pay either. The bank replaced the monthly maintenance fee with outgoing wire fees and cash deposits, which can be done at Green Dot locations.
The bank offers new business owners a free debit card, which requires no ATM fees as long as you withdraw from MoneyPass ATMs. You also get the ability to make mobile check deposits and conduct mobile banking 24/7.
Bank of America is a good option for those who want an online account as well as the opportunity to go to physical branches when needed. Since there are more than 4,100 branches across the U.S., it streamlines your experience, no matter where your business may be.
The bank requires a monthly service fee of $12 for the business checking account, as well as a minimum opening deposit of $100. However, the monthly service fee can be waived if you keep at least a $10,000 minimum balance.
There are multiple types of business checking accounts that you can go for, depending on your preferences. You also have interest-bearing accounts with an API of up to 0.03% on your balance.
If you prefer your business checking account to have a brick-and-mortar location so that you can make cash deposits with ease, then you may use the Wells Fargo Initiate account.
With this business checking account, you get $5,000 worth of fee-free cash deposits. The account does have a $10 monthly maintenance fee, but it gets waived if you have a minimum daily balance of $500.
The Wells Fargo business checking account holds potential for growth, as it allows you to open savings accounts and personal accounts, provides business credit cards, and offers access to business loans.
Since it is a big bank with more than 4,900 branches, the requirements to get a business checking account are stricter. As a new small business owner, you will need to present a business's employer identification number.
Getting a new business bank account may seem challenging when you haven't been in the industry for long. Banks want account owners they can rely on, and if you have a new business, you have no history to prove that you are legit.
Luckily, there are many banks out there that accept giving accounts to new businesses. You just need to browse through them and determine which one works best for your needs.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?