“Since one fails often, address markets that make it worthwhile when one does succeed.”

NO!  You cannot use your personal checking account for your business.  Even if you are generating minimal revenue, you have to have a separate business checking account.  Let me tell you why. If you do not separate your business from your personal expenses, the IRS will eat you for lunch should you ever be audited.  It is that simple.  If this is not reason enough, in some cases it may be illegal for you to mix your personal and business transactions.

 5 Reasons to Open a Business Bank Account:

  1. Makes accounting easy, and gives you an important line of separation for tax purposes, especially audits.
  2. Banking busywork can be delegated to employees.
  3. Better rates on card processing fees – Some banks offer reduced fees for credit card transactions to business account holders.  Also, it opens up options to get card processing from additional services.
  4. Increased Level of Service – Since there’s much more money flowing through business accounts, they require a better level of service.  At local banks, you will often see that businesses have their own dedicated tellers.
  5. You can accept check written to your business name

Opening a business bank account involves many of the same considerations as did opening your personal bank account.  But there are a couple more wrinkles.

First, you have to choose your bank.  Do you want to stay with your current bank or to try somewhere new?  Should you go to a big national bank, or follow along on a recent trend and go to a more local institution?

You may have a good relationship with your current bank, and if you do you may want to set up your business account there.  More, different and new business types and/or bundled services can sometimes get you quantity discounts and reduced fees.  Sometimes.  It is something to look into.  Also, the more business you do at a bank, the more times you walk into a branch, the better they will know you.

The reason for using a smaller, more local or regional bank is precisely because you can get to know the bankers.  Personal knowledge can often translate into personal, that is, better service.

 Local Banks

  • Personal Service
  • May have a Business Specialist
  • But…Limited Hours
  • And lines

Call around to your desired bank and see what their requirements are.   Here’s a great resource for finding the local banks with the lowest fees http://www.nerdwallet.com/business-checking-accounts/

Online Banks

  • Open 24hrs
  • Huge selection
  • Access from anywhere in the world
  • Higher interest earnings

Everbank, just like some local banks, they have dedicated business specialists you can speak with.

*Note: Make sure your bank of choice will integrate with




Except in some limited circumstances, like if you are in telemarketing, precious metals, gambling or are a government entity, you can open your account on-line.

Again though, this decreases the level of interpersonal interaction you will have with your banker.  If being personal is important to you, it is better to go into your branch to start your account.

Once you have chosen you bank, you will need to gather your paperwork.  The documents you have to have to open an account vary by the type of business you are operating (sole proprietorship, partnership, LLC, Corporation or some other form).

 Suggested Documents for Opening an Account:

Business BAnk 1Business documentation such as filing documents, organizing documents, articles of incorporation and/or certificate of resolution

  • Your Social Security Number or Employer Identification Number (EIN)
  • Name and address of your business
  • The state in which your business operates
  • The state in which your business was formed
  • Date your business was established
  • Your Social Security Number, address and date of birth

Setting up a business bank account should not cost you anything.  If the bank wants to charge you, leave.  Charging you to set up an account is a sure sign of outrageous fees down the road.  You will, however, have to make an initial deposit that can range from $25 to $100.  That money is still yours; it is just in a new place.