Requirements to open an account

Hello, and welcome to this module Requirements to Open up a Business Checking Account. Now this is going to be a jampacked module. I’m going to cover a lot of information in this module and also give you the blueprint to identify which type of account you should open up. So let’s go ahead and go into here’s what we’re going to cover. So, number one, I’m going to cover the few, the important features you bank needs, the documents you need to open up a business bank account, the best banks for small businesses and startups, highly rated banks, business banking checklist, and then how to set up a business checking account. So let’s go ahead and hop right in. So what documents do you need to open up a business checking account? Well, you either did an LLC. So you, so if you formed an LLC, you’re going to need an article, your articles of an organization, your operating agreement, and then a business license.

if it’s applicable in your particular city, state, or local municipality. If it’s a corporation, you’re going to need your articles of incorporation, your corporate bylaws, and then your business license, if that’s applicable. And then also when you’re opening up a business banking account, you do not need typically to use or open up your bank account with your social security number. So they may ask you to verify your identity as an individual, but 9 times out of 10, they’re going to use your EIN number. And if the bank still requires you to submit your social security number, no, that as basically being used for internal database. So should something happen to you? Like, you know, should something happen? They can say, well, who was the, who was the owner of this particular business checking account within your beneficiaries can receive that information? So that’s the reason why we want to make sure, you know, you have your EIN number and the same logic applies for credit applications.

Never add any social security number, always use your EIN this step, but for banking purposes, they’re going to use, they’re only gonna use it for internal purposes. So these are the things you want. LLC and your EIN number. So that’s really essentially it. And then you obviously want to have your, your, your contact information and all that stuff would you already would have. Then, when it comes to the best banks for small business and startups, there’s a few handful of banks in this list is what I will consider for startups and young businesses less than two years old, Chase is going to be a really strong one, PNC Bank, SunTrust or Truist, which is I believe SunTrust. And now BB&T have combined and they’re forming Truist, but essentially you’ll still see SunTrust Bank and then some Truist Banks, but these are solid banks for startups.

Even regions bank is a solid one as well, but these are some really, really good banks. And the downside of these banks is they have limited locations in the country, so they won’t be the best option for everyone. But again, like I said, before, I stand behind Chase, Chase is a phenomenal bank to be banking with. And they’re aggressively growing in, across the country. Now a few things. So Live Oak Bank is an SBA preferred lender. That’s completely online. However, they offer a number of SBA loans to choose from SBA seven, a loans, 504 or 504 “green loans”. They also handle other government, small business lending programs such as agricultural loans. So later on in this particular system, I’m going to be covering SBA loans in a little bit more detail, but just know if you set up a relationship with Live Oak Bank, Live Oak Bank, they’re an online lender and their preferred for SBA, Bank of America, Wells Fargo, Chase and Citibank.

These are considered the big four and operating almost all branches and operate most bank branches in the United States. So Chase is really, really aggressively growing. Before, Chase did not used to be in North Carolina and now they are. So, and I’m currently in Atlanta, Georgia, and there’s a Chase all over the place. And literally like in the last, I would say 24 months, I have seen Chase upon Chase upon Chase open up. So Chase is a really good one. And then regional and or community banks often has less strict requirements. So if you have a regional bank or a local credit community or credit union, that’s in your area, you can build a relationship with them as well because their lending requirements are a lot lower. But they are decreasing the number of banks available in some local banks will not offer the features you want.

So like business management or multiple tools at multiple locations. So just take that into consideration. If you do use a regional or local bank. Again, in my opinion, I don’t want to keep doubling Chase here. I would just recommend Chase for a number of reasons. Especially when we start getting like those cash cards, they’re going to give us those really, really high limits. And then once you’re leveraged with Chase, you can leverage that documentation for another relationship. Now, a few other things to consider, online lenders often have looser lending requirements and they will approve your funding for newer businesses. And they’re typically less likely to require collateral. However, alternative lenders will have a higher interest rate and overall cost than traditional bank financing options. So if you do an online bank, which I’m going to include a list, not just of online banks, but a list of lenders, those are going to be, you know, ones you want to consider.

And then micro lenders are typically less than $30,000, excuse me, $50,000. And they come with short repayment terms. However, since micro loans are supplied by private non-profit organizations, they will also most likely have higher costs than a traditional business loan or business banking relationship. All right? So that’s that. Now let’s cover the business banking checklist. So I know we already covered the requirements, but I was wanting to make it very, very clear. So that way, when you get to the, to the bank, you’re, you’re good to go. So, number one, you’re going to have two forms of IDs for the principal ID the owner of the account or the owner of the business. So you’re going to have like a Driver’s License, Passport. If you’re living at a different address than what’s listed on your ID, then you may potentially need to bring a utility bill cable, bill phone bill, or any type of bank.

So that way they can verify your address. Should they need you to verify that. And then also you want to have the EIN number. So remember I told you to keep a copy of the EIN letter that you received from the IRS. So you’d just want to just have a, download a copy of that. You also want to have your articles of organization or your operating agreement, business licenses, or your articles of incorporation, if you are in Inc. And then a letter of good standing from any other foreign filing. So if you are incorporated in another state, then your current bank, then you’ll want to bring that foreign entity, assuming you’re filing a bank account in a different state, for example, let’s just say you set up a Nevada Corporation, or you set up a Delaware Corporation, but you’re wanting to set up a bank account in the State of Georgia.

Then you would number one, need to file a foreign corporation articles in the State of Georgia, and then bring that information in the State of Georgia to file and open up your bank account in this example, or you can just go to Delaware or Nevada and open up the account there, whichever, whichever suits your fancy. So, I mean, that’d be pretty cool to go out to Vegas, open up a business checking account, have a great weekend, and then come back or even Delaware. No, Delaware does, It’s not as obviously popping as Vegas, but I know Delaware has a lot of casinos and stuff, as well as an example, right? But this is the checklist you want to have when looking at your business banking, um, accounts, opening it up and all that good stuff. All right. And then you want to have the cash to deposit, obviously.

So each bank has a different minimum balance and the requirements typically to open an account are anywhere between $50 to $2,500. So you’ll just want to check with that and I’ll provide a list of that way, you know? So how do you set up a business account? It’s really simple. You go to a physical branch nearby and you open up the account in person doing this will also get you a few other things, all done in one trip, those things. Number one is going to include open up a business checking account of your choice based on your needs. You also want to set up overdraft protection and account notifications as possible. I would highly recommend this. You’ll want to potentially establish a merchant account. And if not, you can obviously always set up a merchant account with Stripe. That’s actually my preferred merchant account is Stripe, which isn’t with a bank, but if assuming you need to set up a merchant account, you can do that.

Um, you’ll also want to set up a CD or you could potentially set up a CD and apply for secure loan. That’s optional, but it’s highly recommended. And in the next module, I’m going to cover how that process would work. If you can ask your banker any questions regarding the account and any recommendations for your business. So when you go to a local branch, you can get a little bit more detailed there. So right below this video I’ve included two things. So the first thing I’ve included and you’ll see right here is highly rated banks list and then bank features. So I’m going to cover the bank features first. So just as just so you know, these are the things you want to be looking for in a bank. So number one, are they a member of the SBFE, all right? So this is going be a

requirement already covered in the previous module. Why? Are they an aggressive lender? Okay. You want to know if they are an aggressive lender? Do they have CD secured loans? Do they have merchant overnight funding available should you decide to do a merchant account with them? Do they have a free debit card? You know. Do they have payroll service should you need to open that up? Again, it’s not as high, but it is. It could be relevant online and mobile banking, the number of business checking account options that they have. It’s going to vary between bank, but typically they’ll have 1 to 3 options, monthly account fees and minimum balances. This one’s huge. So many banks will waive the monthly fee. If you met the minimum requirements, if you’re a new business and you want to seek out bank accounts that are not going to have higher minimum fees, or you’ll be able to keep the minimum balances in that account.

So you can avoid fees, transaction limits. So this is going to vary per bank, but do they have transaction limits for the number of transactions that you can execute? And then you’ll want to look into the bank features. So remote mobile deposit and your percentage business credit cards, which is a huge one. This is going to vary by bank loans of financing options, lines of credit, SBA loans, equipment financing, all that good stuff, depending upon what you’re looking to do, personal guarantees required on credit lines, bank branches, and ATM’s all over the country. So this list kind of gives you like what to be considering when you’re going out to find a bank. And then the other thing that’s huge. I mean, this is just really, really powerful. So right below when you click on this, this sheet is going to pop up and then you’ll see a couple of columns here.

So you’ll see the bank name in this column. Then are they a member of the SBFE. So I’ve done this homework for you. Are they an aggressive lender? Do they offer a CD, secured CD loans? Do they have next day funds? If you’re doing funding for merchant accounts? Do they have, what are their business checking account options? What is the minimum amount to deposit? Do they have a monthly fee? And then how do you get the monthly fee waived? And what are the other fees that they have associated with their particular bank? What financing options they have business credit cards, and then any other features. So this is an extremely, extremely detailed spreadsheet. Um, that’s covering all the information that you’re going to need for your business banking relationship. So if you wanted to look at, let’s just say, I wouldn’t, again, I’m just, I’m going to be extremely biased.

I would stay far away from Wells Fargo, in my opinion, they’re, they’re just terrible, but they do offer secure lines up to $250,000. So this is pretty, pretty powerful, but I wouldn’t tie up my cash like that. So, but you can see, right, if you’re looking at SunTrust, you can see that they are a member of the SBFE. They are a conservative lender. They do offer secured loans and you can see the list here, right? Business checking accounts, they do. And it’s giving you the minimum to open up an account, versus if you want to look at Chase. Again, that’s like my preferred, you can see that they’re moderately aggressive and they are okay. Are they a member of the SBFE, they are, okay? And they offer secured loans, it’s going to say no, but technically they do.

I was able to establish not necessarily their secured loan, but I wanted to open up a line of credit and I was approved conditionally. They just want me to put up some collateral. So I did. So it was technically a huge secure loan. So you, you could. It says a line of credit. It acts like a secured loan. So it depends on your banking relationship and who your business banker is. And if they’re able to go to put that up for you. But this kind of goes into all the different things that they have. It’s saying to open up a bank account here, there is no minimum, but I would recommend you start with like, you know, $25, a $100, and then their monthly fee, and then what’s needed to waive their monthly fee. And then also, is breaking down the different information on the business checking accounts, and then business loans starting at $5,000 and then loans, equipment financing at $10,000 and then commercial real estate at $50,000 for 7 to 10 years.

So, and then again, again, I’m going to keep on going. So I have the Ink Unlimited Business Card. That was my first $51,000 car. Then I got another one in a different business for $23,000. Then I have the ink business. Then I have the ink preferred for $10,000. And those are the only three business cards that I have with Chase. Then I have a $50,000 line of credit with them, then a secured loan. So Chase again is my opinion is really, really powerful, but assuming you don’t want to go with Chase, which I don’t wanna oversell them here. There’s other banks here. So PNC is another solid one, typically a conservative lender. They did not approve me. So I’m a little tight and salty with PNC, cause they didn’t approve my line of credit. They said I had too many inquiries at a time and this was like two years ago.

So I’d have, I haven’t been back since. So I was like, well, if we get you PNC, but PNC is a, still a solid option to consider, Radius, HSBC. US bank, isn’t a member of the SBFE but they are a moderate lender. And one of the things I did as I’m wrapping this up is I was approved with that $51,000 card with Chase. And then I just leveraged my credibility from Chase with that business banker. And then I said, Hey, look, I already have this $51,000 limit with chase what’s up, which, which I’ll go and do. And then that was it. Then he went through a special application and then submitted the application. That’s the thing about business banking and, and, and building a relationship. You want to have a relationship with a business banker who can go and communicate through to the underwriters on your behalf and paint the picture versus you just submitting an application randomly online case in point with the US Bank, had I just went directly to the US bank versus going through a banker.

I would have been, I was always auto-approved for, I think it was like $9,000 or $10,000, but being that he was able to provide my credit card statements from Chase and my bank statements and my financials, my profit and loss statement, all that said well, and then we are, when we applied for $50,000, I got approved for $50,000. At this point, I’m like a little tight because I think I probably got, I probably could have gotten approved for $75,000 or $100,000, but I just wanted to build that relationship with US Bank. And then in a few months, which I’m getting ready to do, go apply for a line of credit with US Bank unsecured line of credit. But again, that’s an example of how you want to consider this and then again, it’s going through all the details here and what will always require that you’ve got Citibank in their region’s bank.

So again, if I’m looking at this for you, I’m looking at, I’m looking at a bank that’s going to do a moderate, moderate aggressive, so Radius, which is lending club. So I’m looking at SunTrust, Chase, Bank of America. Again, I would stay away from Wells Fargo. Their customer service is terrible, but again, you might not like customer service. I love customer service. So Chase’s customer service is phenomenal. And so as US banks. But anyways, go through this, look through this list, identify the bank that’s going to be most suitable for you. And then once you establish that account with that particular bank, you want to stay with that bank and go all in. But once you’re with that bank, you can leverage the approvals once you’ve been with that bank with other banks. Okay. So hope this video helps and I will see you in the next module.