In this week’s Money Monday post, I answer Deva's question: How do I get loans, at a decent interest rate, when I'm self-employed? No banks seem to trust my income.Read More
Do you need a business bank account as a blogger and entrepreneur? If you are a sole proprietor, you are not legally required to have a business bank account in order to own and run your business. (This is according to U.S. law for sole proprietors. To be safe, do some homework and check your state’s regulations on this topic.)
However, it is helpful from a clarity and an organizational standpoint to separate your business finances from your personal money.
Having a separate account for your business finances, allows you to be able to quickly monitor whether your money is growing or depleting. Not to mention that makes tax filing easier - and the audit process, if that were to ever happen.
Everyone mixes up their money from time to time, but get the sooner you begin the practice of keeping them separate, the sooner you will have a sense of clarity around the money in your business.
Some banks do charge a fee to open a business account or require a minimum deposit amount. If either is not feasible for you, and you are a sole proprietor, you can choose to use two regular checking accounts. Dedicate one for your business expenses and the other for your personal funds. We are a big fan of the hybrid-checking account with Radius Bank because they actually earn interest on the money in your checkings.
When it comes to choosing a business bank account, use the following questions to guide your decision process.
How many ATMs do they have? (If you travel a lot, you may need more ATM locations.)
Does your current personal bank offer a business account option? If so, what deals can they offer you?
Does the bank support your local community? (A smaller bank or credit union may be the best fit. if this is important to you.)
Are there any annual fees?
Is there a minimum account balance that you need to maintain? If so, what are the fees if you fall below the minimum balance?
Does the bank offer SBA loans or other funding opportunities for small business owners?
Do they link to any bookkeeping programs? If so, which ones?
Opening a business bank account is a big step in your entrepreneurial journey! Have you opened one or thinking about it? Let us know in the comments, below!
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This post was in partnership with Radius Bank.