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When is the Best Time to Open a Business Checking Account?

You finally did it! You got your business up and running, all of that time spent planning has paid off and you are now a real business owner. You might not think opening a business checking account is a priority, but the earlier you open one, the easier your life will be down the road.

Before we get into the when and the why, let’s answer an important question that’s probably on your mind: Do I need to already have made money to open a business checking account? The answer is no, you do not need to have revenue in order to open a business account.

Your next question is likely, Why can’t I use my personal checking account? If you operate your business under a legal entity that is separate from you, such as an LLC, you are legally required to separate your company’s finances from your personal finances. While you don’t necessarily need to open a business checking account, you cannot use the same account you use for everyday personal spending.

Not convinced that it’s time yet? Below are a handful of other reasons why you should open a business checking account today.

1. It’s easier to stay organized with a separate business account

If you are trying to run your new business through your personal checking account, you are going to run into problems sooner than you think. Our Tailored checking account offers unlimited transactions, keeping them all in the same place and organized away from your personal life. Having your business transactions separate also allows you to collect receipts and write checks for expenses, making your business easier to manage.

2. It’s more professional

Once you start your own business, it is important to maintain a positive image. After you open a business checking account you will be able to accept checks written out to the business instead of just your name. Now customers will experience a more professional transaction and will be more likely to view your business as legit. Here you could open an online business account for your company in less than five minutes.

3. It provides protection

Another step you should take while setting up your business banking account is establishing an employer ID number (EIN). This number can replace your social security number when you are filling out information for your business account. This helps protect you and your business from potential fraud and theft. File for your business’s EIN here.

4. It will set you up for future success

As your business starts to grow, having a business checking account will be even more important.  Most business checking accounts include a checking account, savings account, credit card account and a merchant services account. A merchant service account is necessary in order to accept credit and debit card transactions from your customers.

5. It provides more benefits for your business

Sometimes finding the right business checking account can do more than just keep you and your business organized. We offer extra benefits when you sign up for a tailored checking account. Whether it’s no hidden fees or 1% cash back, looking into the right business checking account for your business will pay off.1

1 The Debit Card Rewards Program (Cash Back Rewards) will provide 1.00% cash-back on all Qualified Purchases made by eligible Rewards Checking account holders if the account holder does any of the following; meet the requirements, is grandfathered in, or keeps an average balance of $2,500 or greater within the calendar month in their Rewards Checking Account, or receives total deposits of $2,500 or more in their Rewards Checking account via qualifying Direct Deposit within the month. Qualifying Direct Deposits are Automated Clearing House (ACH) credits, which may include payroll, pension or government payments (such as Social Security) by your employer, or an outside agency. LendingClub Bank, N.A. may require documentation to verify that credits are Qualifying Direct Deposits. The value of this reward may constitute taxable income to you. You may be issued an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. Please consult your tax adviser, as LendingClub Bank, N.A. does not provide tax advice. Qualified Purchases include signature-based purchases made with a LendingClub Bank Debit Card tied to a Rewards Checking account enrolled in the Debit Card Rewards program. These are “credit” purchases that can be made in stores and online. To make a signature-based purchase, select “credit” rather than debit at point-of-sale kiosks. The “credit” option is most often pre-selected when making purchases online using a debit card. Online subscription payments may not be considered signature-based purchases. The payment transaction type (signature-based or other) is ultimately decided by the merchant and how the transaction is transmitted to LendingClub Bank, N.A. at the time of processing. We reserve the right to determine if a transaction was a Qualified Purchase, and to establish additional types of Qualified Purchases that could be made available in a variety of ways. Any goods or services purchased with the LendingClub Bank Debit Card that are returned or otherwise credited to your Account are not qualified purchases. Unlawful purchases and purchases of currency, cash or cash equivalents (including, without limitation, currency from the U.S. Mint, Travelers Cheques, gift cards, Cryptocurrency, Casino Chips, Peer to Peer Payments, prepaid debit cards, account openings, loan payments, or other cash equivalents) made with your LendingClub Bank Debit Card are not Qualified Purchases. We may require you to provide documentation to validate that certain purchases are Qualified Purchases. LendingClub Bank, N.A. reserves the right to modify or discontinue this program at any time. Your enrolled account must remain open, active, and in good standing to participate in the program, meaning: No NSF (non-sufficient funds) items during the preceding twelve calendar months in your checking account (regardless of the type of checking account). An eFunds check must show no negative history in the preceding twelve months and all monthly servicing fees must have been paid in full for the 12 preceding months. LendingClub Bank, N.A. reserves the right to modify the description of “good standing” at any time. If you or the Bank closes your account for any reason before the end of the statement cycle, you will forfeit all rewards accrued through your linked Debit Card during that statement cycle.

About the author

Alain Glanzman

With years of experience in business, Alain is the Vice President of Small Business Banking. Alain understands the connection between banking and business and focuses on small businesses growing their deposits.