Opening a Business Checking Account for Your Fintech App

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When you are just starting in the fintech sector, it may seem easiest to run business transactions through your personal credit card or checking account (especially if your transactions are few and far between). 

However, once your fintech operation begins to pick up steam, you can quickly start to blur the line between business and personal, leading to a nightmare come tax time, never mind keeping track of your finances.

Your personal checking account is a great place to keep your personal affairs running. Still, it can be challenging to maintain all of your records in one place and make sure everything is organized. 

Most small business owners opt for a personal checking account and a business bank account to solve this problem. This could be the right solution if you are eager to start an online business or want to take your existing business on the go.

What is a Business Checking Account?

A business account is a bank account used exclusively for business transactions instead of your personal checking account. A business banking account keeps your business transactions, cash flow, and credit accounts connected to your fintech business rather than linked to your personal finances. Some banks now allow people to open a bank account in their business name. If you were to get paid by a client, they would be paid into your business account instead of your personal bank account.

Keeping a separate business account makes it easier to manage your business expenses. You can track transactions, and any business expenses, through the account. This will be much easier to manage than if you attempt to do it all through a personal account.

Why Do You Need a Business Account for Your Fintech?

  • Protect your personal information

With a business account, you add a layer of protection between you and your customers. This can lower your risk of any fraudulent activity resulting in identity theft.

  • Develop a banking relationship

As your fintech grows, you will likely need more accounts. Keeping your business account in good standing and developing a relationship with a financial institution. 

Obtaining a business account with a debit card is the first step in looking for new banking opportunities. It also helps you build business credit for potential lending opportunities in the future, such as cash or credit card applications.

  • Tax preparation is a breeze

This type of account simplifies your tax preparation! You are giving your accountant a gift that saves manual labor as well. When tax time rolls around, often, separating personal and business expenses can be complicated. Businesses trying to avoid the burden of confusion at tax time often create separate business accounts. This allows you to monitor and track specific transactions and is a great way to stay on top of any tax fees. 

You will need to keep business and personal transactions separate, especially as you bring more employees on board. That will have to be accounted for when you file your business and individual tax returns.

How to Open a Business Checking Account for Your Fintech App

A business owner needs a bank account to run a successful company. Those in the fintech industry, in particular, may have trouble opening an account as most banks bristle at the idea of online financial technology. However, as a small business owner, you will want to find the best business checking accounts for efficiency and financial purposes.

What Are the Bank Requirements To Open a Business Account?

Ensure you check the requirements of a potential bank before applying to open a new small business checking account. To avoid running into any problems and, as a result, losing out on or delaying a deposit. 

Banking services can differ between institutions, and you’ll want a financial institution that will work with you in the long term. Make sure your expectations are in line before choosing the best institution for your business! Make sure you can deal in multiple currencies, make international transfers, and receive local, national, and global payments, as that is what most people will be looking for.

What Does Your Fintech Require For Business Banking? 

Regardless of where they are located, all businesses will need a bank account. There are also certain banking functions all fintech firms should learn about and implement.

Determine the essential banking operations your company requires, such as the ability to send and receive funds (including international transfers), foreign currency accounts, a business loan, and excellent customer service. 

You will also want to ask:

  • Online banking login options
  • If there are atm fees or overdraft fees
  • Minimum balance requirement
  • If they accept direct deposit
  • If they charge a per-use transaction fee
  • How many monthly transactions are allotted
  • Can you have a debit card
  • Attached credit card opportunities
  • Is there an account with unlimited transactions

When it comes to finding a bank account that matches your industry and your future banking needs, we always recommend creating a plan that lays out all the essential details of your business to find the best fit.

Choosing a New Business Checking Account

There are several different types of business bank accounts, so you need to find the best business checking account (and possibly a business savings account) to provide your company with what it needs now and in the future. There are a lot of different types of bank accounts. 

Remember that you’ll need to choose one and work one with your bank’s policies and services. You might be required to open a personal account as well, so keep that in mind.

What are the Benefits of Opening a Business Banking Account?

Opening an account with a bank allows you to access various services you may be interested in. For example, opening an account with a bank can help you save money on services like checking and savings accounts, and even merchant services.

The benefits of opening a commercial banking account are numerous. They include the ability to manage your finances online and provide payment information to those who require it.

Business Bank Account Application Process

When opening a business checking account, it is usually acceptable to open it online. However, even if you begin the process online, you may have to attend a physical location before you benefit from the convenience of accessing your account from anywhere.

Research what financial institutions are best for fintech companies, such as choosing one of your local community banks or a credit union in the area. You will also want to determine the monthly fee on their checking account and what deposit rates they may offer you for a savings account (if applicable.)

As mentioned, some financial institutions allow you to open a new account at your bank or credit union online, while others will need you to attend in person.

This is because you may need to provide documentation to the bank. These include original copies of your shareholder agreement, director, manager, or owner documentation, documentation proving your business name, a business plan, personal identification, article of association, registration certificates, and other information specific to the bank.

Don’t be surprised at the amount of information you must provide to a bank or financial institution when opening an account. You can also ask them any relevant questions. Ask them what account you should choose to best suit your current and future needs.

Moving Your Fintech Forward With Sila

As a small business fintech owner, you will want to eventually open a business checking account. However, you may run into some red tape. Sila can help carry some of the burdens. 

With our API, you can add numerous financial features to your fintech app. In addition, Sila’s Wallet API is a digital wallet solution that enables your end-users to fund their mobile wallets in record time, down to the last penny. Our API supports transactions between bank accounts and digital wallets for any funds flow. Our service has you covered whether you are building a wallet app, initiating payment requests, or in-app payments.

Our ACH Payments lends fintech companies the ability to perform ACH Debits, ACH Credits, and bank account to bank account transfers easily. Compliance is made simple, as Sila is a registered bank agent of Evolve Bank & Trust. This means we take the pain out of the necessary audits, OFAC screenings, and suspicious activity filings you will need to operate your fintech.

Sila also offers a Cryptocurrency Wallet API that supports ERC-20 and Solidity smart contracts. The Sila Digital Wallet API allows businesses to develop a programmable, money-intensive solution. Our wallet enables you to test without limitations and takes compliance requirements such as identity verification like KYC (Know Your Customer), AML (anti-money laundering), and bank accounts, digital wallets, and easy payment off your hands.