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Business Bank Account Guaranteed: Best Non-ChexSystems Banks to Open a Checking Account
10
Min Read
Every great entrepreneur knows the importance of having a business bank account to separate business finances from personal finances. And while setting up a business checking account isn’t a complex process, there are business account requirements to be met before they can be approved.
One common requirement among many banks is a good ChexSystems score. The bank needs to determine your risk level and, they do that by checking how well you have managed your personal checking accounts.
Thanks to ChexSystems, which works the same as a credit report, the banks can check out if you have engaged in any violation of banking policies such as refusal to pay banking and overdraft fees, fraudulent check writing, ATM or debit card abuse, or even suspicious transactions. These are the reasons why a business bank account is rejected.
Unfortunately, if you are guilty of any of these offenses, even unknowingly, your score will be affected and you won’t be able to open your business account.
So then what do you do?
Well, lucky for you, several banks allow you to open an online business checking account with them without checking your ChexSystems report. Better yet, these banks tend to be cheaper and easier to run. Not to mention more convenient because their operations are based online. We call them second-chance banks.
Follow along as we give you 8 top second chance banks that will allow you to open a business checking account if you have been rejected by the local banks.
- Bonsai Cash
- Chime
- Nearside
- Current
- SoFi
- Wells Fargo
- BlueVine
- Lending Club Bank
We made sure to only recommend banks that offer the best services including no fees and flexible ways to access and manage the funds in your account. We'll start with the bank we know best--our own.
Note: If you want to open a guaranteed business bank account with no hidden fees, minimums or hassles, try Bonsai Cash. It's an all-in-one online bank account that lets you create sub-accounts or envelopes, manage your taxes, and helps you get paid faster. Open an account today.
Bonsai Cash
Bonsai Cash is a free business checking account that‘s taking the market by storm because of how easy it makes it for small business owners to manage their funds.
The account does not require any initial deposit for you to open and it has no running costs. This means there are no transaction fees or monthly fees.
Once you open an account you receive a virtual debit card that you can use to make all your online payments including subscriptions. You can also scan the virtual card with Apple Pay or Google Pay to add it to mobile payments.
Bonsai also provides physical cards that are shipped to you once they are ready.
The account can be integrated with any payment software you are using which allows you to receive payments directly to your checking account.
However, the feature that makes this account stand out is the envelope feature which helps tremendously in managing your money.
How it works is that you create envelopes where you can store funds for specific purposes. For instance, you can have an envelope for employee salary and another one for tax money. And the best part is you can configure the account so that anytime you receive a payment, a percentage of the money is automatically sent to a specific envelope.
An important thing to note though, Bonsai cash has daily transaction limits. For ATM withdrawals, it’s $300. For card transactions, it’s $2000 and for transfers to external banks, it’s $3,000. That’s a cumulative daily limit of $5,300. Get started today.
Pros
- Easy to open and manage finances
- Free to use
- Envelopes for efficient money management
- Virtual and physical cards
Cons
- Not yet available nationwide
Chime
Chime is another great second chance bank. It does not require that account holders maintain a minimum balance and there are no hidden fees.
Chime allows members an overdraft of up to $200 on debit card purchases but does not charge overdraft fees. You also don’t incur ATM withdrawal fees if you withdraw from any of their 60,000 ATMs that can be found in popular stores like Walgreens and CVS Health.
There is a map on the Chime app that you can use to find the ATM closest to you. Unfortunately, if you are withdrawing from an out-of-network ATM, you will incur withdrawal charges.
A standout feature for Chime checking account holders is that they can make cash deposits although only 8,500 Walgreens support these deposits.
Chime also supports direct ACH transfers to and from the account and you can use it to receive your paycheck.
If you save your money with Chime you stand to gain interest at the rate of 0.50% per year.
And to ensure transparency, Chime sends you daily alerts to show the available balance and any transactions that have happened.
Pros
- Free to use
- Allows overdrafts
- Large network of fee-free ATMs worldwide
- Supports cash deposits in select stores
Cons
- No reimbursement for out-of-network ATM withdrawals
- Technically, Chime does not have a business bank account, but they do not use a ChexSystem
Nearside Business Checking
Nearside is a great non-ChexSystems bank that is always rewarding its members. For example, all new members get a welcome bonus of up to $40 on their first deposit. Additionally, all members get a 2.2% unlimited cash back on every business purchase they make.
Moreover, with Nearside business checking, there are no hidden fees. There is no minimum balance to maintain, there are no monthly fees and thanks to their network of 55,000 ATMs, there are no ATM withdrawal fees.
Nearside Checking Account supports integration with multiple payment solutions allowing you to get paid directly to your account. The account can also be used to make ACH transfers to and from the account.
Once you have built a solid reputation with the financial institution, you may qualify for a business loan of up to $10,000.
Pros
- Free to use
- Amazing offers and rewards for members
- Supports integration with multiple payment methods
- Members are eligible for a business loan
Cons
- No cash deposits
Current
Current is another free-to-use second chance bank that will also allow you to earn interest on your deposits. Their annual percentage yield (APY) is 4% which is way above the national average APY on savings bank accounts which stands at 0.08%.
And unlike in traditional banking, you can access the saved money in your current checking account at any time.
Current supports overdrafts of up to $200 and there are no overdraft fees. The account does not have monthly fees or transaction fees. It also supports ACH bank transfers which means you can use it to receive your paychecks.
To ensure the security of your money, your Current checking account uses biometric authentication meaning you use your fingerprint or face to access your account. They also allow you to block transactions directly from the app which is crucial if you notice any suspicious activity.
Current checking account allows you to easily manage through a combination of tools including an integrated budgeting tool.
Pros
- Free to use
- A 4% APY on deposits
- Supports overdrafts
- Integrated budgeting tool
Cons
- No cash deposits
SoFi Money
On top of having no ChexSystems SoFi Money is great for many reasons. One of them is amazing rewards for members.
To begin with, new members get a signing bonus that adds up to $120. Then all members get to enjoy up to 15% unlimited cash backs on debit card purchases made at local establishments.
SoFi Money also offers interest on all deposits of up to $50,000 deposits at the rate of 1% per annum. That’s not as high as current but it’s still higher than the national average. For balances more than $50,000 the interest rate is0.05%.
This Checking account is free to use. It does not require that you maintain a minimum balance, it has no monthly fees and it comes with a network of over 55,000 fee-free ATMs.
Pros
- Signing up bonus
- Cashback for local purchases
- Offers interest on all balances
- Fee-free ATMs
Cons
- No cash deposits
Wells Fargo
Wells Fargo Checking is a little different from the other business checking accounts we have explored so far. For starters, they require a starting balance of $25 to open the account. Also, they offer three types of Checking accounts and you get upgraded as you build trust with them.
Clear access banking is the starter package. Members get a virtual card that they can use for digital and other debit card payments but they can’t use checks for payment. The account comes with a monthly maintenance fee of $5.
Everyday checking is the second tier account and also the one that best compares with the other accounts we have discussed in this post. It supports overdraft but there are also overdraft fees to consider. Everyday Checking has a monthly maintenance fee of $10.
The last tier Wells Fargo account is the Portfolio account which comes with a bunch of premium benefits including interests on your deposits. The monthly fees for this account are $25.
While these accounts may not be free to use at a glance, Well Fargo provides members with several ways to avoid paying these fees.
The best thing about Wells Fargo is that it’s well established nationwide allowing you access to thousands of ATMs for cash withdrawals and deposits.
Pros
- Supports overdrafts
- Earns interest on your balance
- Wide accessibility
Cons
- Monthly fees to maintain account
BlueVine
BlueVine is a top second chance bank that supports unlimited transactions and has no operating fees. The account even supports check payments and gives you two free checkbooks.
BlueVine does not require that you maintain a minimum balance and it has no hidden fees. Also, thanks to its network of 37,000 ATMs country-wide, you get to benefit from fee-free withdrawals.
For deposits of up to $100,000, you get to earn an interest of 1.2% per annum. However, there are conditions to be met. You either need to have spent $500 with your BlueVine debit card or received $2,500 payments into your account.
Another standout feature with BlueVine is that you can create up to 2 sub-accounts with different account numbers to facilitate better management of your funds. You can also integrate the account with Quickbooks for more streamlined accounting in your business.
And if you are running the business with a partner, BlueVine allows you to share the account with them or even a trusted employee.
BlueVine supports cash deposits using your debit card at any green dot location. However, the deposits are subject to a $4.95 processing fee.
Pros
- Free to use
- Unlimited transactions
- Fee-free ATM withdrawals
- Interest on balance
- Cash deposits
Cons
- $4.95 cash deposit processing fee
LendingClub Bank
As you can already deduce from the name, this is not just a business checking account. It’s also a means to secure funds for your business. Lending Club allows you to take a personal loan of up to $40,000 and a business loan of up to $500,000.
Other than that their Tailored checking account is a great option for small business owners and it’s completely free if you have a balance of $5,000 and above. You also get to earn interest on your balance at the rate of 0.1% per year.
However, If your balance is below $5,000, you will have to pay a monthly maintenance fee and there is no interest. And, although you are not required to maintain a minimum balance, LendingClub will require that you make an initial deposit of $100 to activate your account.
On the bright side, you get 1% unlimited cash backs on payments made using the LendingClub debit card. And, you don’t incur ATM withdrawal fees even with out-of-network ATMs. LendingClub will reimburse you.
The account can also be integrated with other business solutions like Quickbooks for easier accounting.
Pros
- Allows you access to personal and business loans
- Earns interest on your balance
- No ATM withdrawal fees
- Unlimited cash back for debit card purchases
Cons
- $100 initial deposit required
- Monthly fee for balances below $5,000
Conclusion
Having a poor personal credit score is a major blow if you are looking to open a business bank account.
Thankfully, it’s not the end of the road. You have the option to open a business checking account online with any of the institutions we have listed in this post don’t.
These banks are not interested in your poor personal credit history. So the online banks won't do a credit check. They also don't need a Chexsystems report.
But, the best part is that they also come with unique benefits that you won’t normally find in a traditional bank.
They are the future and hopefully, you have found the best business bank account that works for you.
What Defines a Verbal Contract?
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.
When is a Verbal Agreement Legally Binding?
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:
- Offer and acceptance: An offer is made and accepted by another party involved in the agreement;
- Consideration: The involved parties must exchange something of value (money, a service, time, etc), this is known as consideration;
- Intention and certainty: All parties must fully understand the terms of the contract and intend to make a legally binding agreement freely; and
- Capacity: The parties must have the capacity to legally enter into the contract; they're above age and of a stable mindset.
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.
How strong is a verbal agreement 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.
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get started nowWhen are verbal agreements not enforceable?
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:
- The sale of real estate or vehicles
- Real estate leases lasting longer than one year.
- Property transfer following the death of the owner.
- The case of a party agreeing to pay debt for someone else.
- Any contract that requires more than a year to fulfil.
- A contract involving and exceeding a specified amount of money (which varies by state).
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.
How are Verbal Contracts Enforced?
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?
How can you prove an oral contract?
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.
Written vs Verbal Contracts: What's the Verdict?
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.
Say hello to digital contracts
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.
Benefits of written contracts
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.
Create Professional Contracts with Bonsai
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?
Join 500,000+ freelancers using Bonsai's free contracts & invoices.
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