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New Contributor
mompreneur1
Posts: 71
Registered: ‎10-09-2009

Help--Business Needs Bank Account ASAP!

[ Edited ]

I own a small business in California and I am in need of a business bank account. I do not have good personal credit (FICO is around 580 range) so I am concerned about applying to open a business bank account. 

 

Therefore, my question is a fairly simple one...which credit unions or banks are more lenient than others when it comes to opening a business bank account as far as your own personal credit is concerned? I currently have a personal account with BofA but am not positive I will be able to open a business account there (based off account status and previous NSF fees). I would actually prefer to open with a CU.  

 

Also, I read Business Credit 101 and noticed step #2 says to incorporate your business. Is this step mandatory in order to open a business bank account? I own my business as a sole proprietorship--which I don't believe can be incorporated (please feel free to correct me if I am wrong on this one)

 

I need all the help and feedback I can get!

 

Thanks in advance, guys! :smileyhappy:

 

Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007

Re: Help--Business Needs Bank Account ASAP!

Incorporate means to form an S Corporation or C Corporation, which is a different entity than a Sole Proprietership or Partnership. California LLC or LLP are a variation of some of the basic entities. Trying to say that a business should be one or another without LOTS more information is crazy.

 

If you are a small business, then you would normally be a SP at least in the beginning. Any other entities have much larger basic operating and accounting costs. With the limited information that you have posted and with you asking about opening a business bank account, I would be surprised if incorporating is reasonable for you.

 

There will be challenges with running a business with poor credit but this depends a lot on what you are doing.

 

Why do you think you need an actual business bank account? Do you have a dba?

New Contributor
mompreneur1
Posts: 71
Registered: ‎10-09-2009

Re: Help--Business Needs Bank Account ASAP!

[ Edited ]

GregB wrote:

Incorporate means to form an S Corporation or C Corporation, which is a different entity than a Sole Proprietership or Partnership. California LLC or LLP are a variation of some of the basic entities. Trying to say that a business should be one or another without LOTS more information is crazy.

 

If you are a small business, then you would normally be a SP at least in the beginning. Any other entities have much larger basic operating and accounting costs. With the limited information that you have posted and with you asking about opening a business bank account, I would be surprised if incorporating is reasonable for you.

 

There will be challenges with running a business with poor credit but this depends a lot on what you are doing.

 

Why do you think you need an actual business bank account? Do you have a dba?


 GregB,

 

 

Thank you for your insight!

 

To give you a bit more info, I own a legal administrative support business and I am operating under a dba.

 

I would like a business bank account in order to keep my personal and business finances separate. I have one employee and would prefer to pay her from a dedicated business account rather than my own personal account. Any idea how I may obtain one? Which bank I should try?


 

Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Help--Business Needs Bank Account ASAP!

IME, I'm half-owner in an S-Corp, 100% owner in a LLC, and fully own a sole-prop. Prior to owning the S-Corp and LLC, I did use my name and dba name for the sole-prop to open a biz checking at BofA. Now this was 4-5 years ago, but I had no issues whatsoever opening it online and they asked me to come in and fund the account. My credit was in the low to mid-600s at the time and I had a CC and 1 each of checking and savings with them. I funded it but in time I realized the fees weren't worth it and I really dislike BofA anyway.

 

I never did open an account elsewhere outside of BofA as my sole-prop was cash and carry anyway. I never had the need to write checks. Instead, I opened a personal account to save on fees and ran any business purchases via a debit card. I didn't want to volunteer that it was a biz account because the T&C of the personal checking agreement forbade it. I never needed a checking account for the LLC, and have multiple accounts for the S-Corp, all of which were easy to get with the by-laws, Articles of Incorporation, etc.

 

 

New Contributor
mompreneur1
Posts: 71
Registered: ‎10-09-2009

Re: Help--Business Needs Bank Account ASAP!


llecs wrote:

IME, I'm half-owner in an S-Corp, 100% owner in a LLC, and fully own a sole-prop. Prior to owning the S-Corp and LLC, I did use my name and dba name for the sole-prop to open a biz checking at BofA. Now this was 4-5 years ago, but I had no issues whatsoever opening it online and they asked me to come in and fund the account. My credit was in the low to mid-600s at the time and I had a CC and 1 each of checking and savings with them. I funded it but in time I realized the fees weren't worth it and I really dislike BofA anyway.

 

I never did open an account elsewhere outside of BofA as my sole-prop was cash and carry anyway. I never had the need to write checks. Instead, I opened a personal account to save on fees and ran any business purchases via a debit card. I didn't want to volunteer that it was a biz account because the T&C of the personal checking agreement forbade it. I never needed a checking account for the LLC, and have multiple accounts for the S-Corp, all of which were easy to get with the by-laws, Articles of Incorporation, etc.

 

 


Thanks, llecs!

 

I guess I can give BofA a try since I am already a customer. I really dislike BofA as well and was hoping for a referral to a CU that will work with "challenged credit". But I guess beggars can't be choosers....:smileysad:

 


 

Valued Contributor
GregB
Posts: 1,670
Registered: ‎05-24-2007

Re: Help--Business Needs Bank Account ASAP!

If you have a dba and an employee then I would say you definitely want an actual business account. You will need a copy of whatever documents you needed for the dba. This will vary by state. I don't see that a low FICO would affect getting a business bank account at all. The purpose of a credit inq is to confirm your identity, not determine if they are going to open an account.

 

I feel a bit sorry for BofA in the way they were screwed over by our current governement in the financial issues of 2008. BUT, they are horrible to deal with in general and even one of my employees that used to work for them has very little good to say about them. They have horribly mistreated many of my customers and dealing with them resembles dealing with the IRS, or Social Security, or any other goverment agency you can think of. BUT, if you already have a relationship with them and you are concerned about opening a new business account, maybe it might be easier to try and see if you can open your business account with them. You can always move it later.

 

It is getting very hard to find the small business banks that I prefer to deal with as they are getting killed off by our current government and financial condition. Lately my favorite business bank has turned to garbage. This was so business oriented that they only buzzed you in the door if they recognized you and didn't even have teller counter. Now they are struggling for survival.

New Contributor
mompreneur1
Posts: 71
Registered: ‎10-09-2009

Re: Help--Business Needs Bank Account ASAP!


GregB wrote:

If you have a dba and an employee then I would say you definitely want an actual business account. You will need a copy of whatever documents you needed for the dba. This will vary by state. I don't see that a low FICO would affect getting a business bank account at all. The purpose of a credit inq is to confirm your identity, not determine if they are going to open an account.

 

I feel a bit sorry for BofA in the way they were screwed over by our current governement in the financial issues of 2008. BUT, they are horrible to deal with in general and even one of my employees that used to work for them has very little good to say about them. They have horribly mistreated many of my customers and dealing with them resembles dealing with the IRS, or Social Security, or any other goverment agency you can think of. BUT, if you already have a relationship with them and you are concerned about opening a new business account, maybe it might be easier to try and see if you can open your business account with them. You can always move it later.

 

It is getting very hard to find the small business banks that I prefer to deal with as they are getting killed off by our current government and financial condition. Lately my favorite business bank has turned to garbage. This was so business oriented that they only buzzed you in the door if they recognized you and didn't even have teller counter. Now they are struggling for survival.


Good to know--as this was my main concern. Thanks!

Mega Contributor
Creditaddict
Posts: 18,807
Registered: ‎10-23-2007

Re: Help--Business Needs Bank Account ASAP!

Unless you are in check systems because of not paying a negative balance checking account I have never head of being declined a bank account personal or business because you have bad credit.

Many don't even pull a credit report to open (HP at least)

Credit Unions seem to though but they also usually offer a credit product at same time if they like you and your credit!

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New Visitor
rbailey1962
Posts: 2
Registered: ‎06-05-2012

Re: Help--Business Needs Bank Account ASAP!

PNC doesn't check your credit or for chex systems

Valued Member
hawaii12
Posts: 47
Registered: ‎04-23-2012

Re: Help--Business Needs Bank Account ASAP!

you can try suntrust or chase as long you have your EIN and articles


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