How to open a business bank account online — Here’s your guide

Wise
05.21.19
5 minute read

If you’re a company owner or entrepreneur, chances are that you’ve already got a pretty busy schedule, therefore opening your business bank account online sounds like a perfect alternative. But unfortunately, this not always easy to do. Different banks have their own processes for new business customers, and many require you to attend a bank branch in person.

This article covers all you need to know about why you need a business account, the reasons banks often ask new customers to apply face to face, and a smart solution if you want to open a business bank account online — Wise.

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With the Wise borderless account for business, you can set up, and operate your account online, no matter where you are in the world. You’ll also be able to access a whole range of innovative features to cut your costs and limit the time you spend on admin. Ready to hear more? Let’s dive in.

It's not easy to open a business bank account online — here's why

Opening a bank account online can be tricky to do, partly because of a law called the USA PATRIOT Act.¹ This 2001 act, signed shortly after the terrorist atrocities of 9/11, is designed to deter and punish terrorist groups, by preventing money laundering and other methods of funding commonly linked to terrorism and organised crime.

One of the requirements of the act is that banks know who holds accounts with them. Different banks interpret this requirement differently. But broadly speaking it means that new customers must provide identification, and have their details verified, so that anything suspicious — such as money laundering, financial crime, or identity theft — can be spotted.

Since 2001, many banks have started to use more advanced methods of checking ID for personal bank accounts, which means it is now possible to get your personal checking account set up without needing to set foot in a bank branch. For business accounts, though, this is still tricky.

For one thing, there is often more paperwork to check for a business account. There may be more than one person who needs to be ID verified, and there could be a range of different acceptable documents depending on the business type, legal structure, and so on. The bank will need to check that you, your business partners, and the business itself are all legitimate — which takes a lot of documentary evidence, and can also take a lot of time.

Add to that the fact that demand for business bank accounts isn’t as high as for personal accounts, and fixing the process for small business owners just isn’t necessarily a priority for banks. Many simply have simply not bothered to automate or speed up the procedures used — which means getting a business bank account is one of the few essential financial services which you usually still have to show up at a branch to arrange.²

Pressed for time, and looking for an account which will suit your business and can be set up from the comfort of your own home? We do have some good news. A small number of banks will allow you to arrange a business account online - although you’ll typically need to be a sole proprietor, or already hold a personal account with the same organisation.

If that doesn’t work for you, then maybe you need a different solution. More on that, next.

Open account online

Opening online business bank account — a worthy alternative

If you’re struggling to find a business bank account you can open and manage online, it’s time to check out the Wise borderless account for business.

This is a smart new type of account, with no monthly service fee or minimum balance. It’s designed for business owners, and offers a selection of features designed to save both time and money. You’ll be able to integrate your borderless account with Xero for seamless accounting, automate workflow with the Wise API, and make batch payments to cut the time you spend on admin.

The borderless account is also made for businesses with global aspirations. It’s a true multi-currency account — perfect if you want to work with suppliers, customers, or employees based overseas. You can hold any of dozens of different currencies in the one place, and switch between them whenever you need to for a low fee, and using the mid-market exchange rate. You’ll also get local bank details for the US, UK, euro area, Australia and New Zealand, so you can receive payments in these regions fee free.

Set up your account online, by providing your personal details, and uploading copies of your key business documents, such as a certified copy of the Articles of Organization in the case of LLCs.³ You can then get started within just a few days, once your account has been verified, with no need to leave the comfort of your own home or office.

Opening a business checking account online with a traditional bank

Whether or not you can open a business account online will depend on your personal circumstances, the type of business you have, and the account you want to open.

It’s important to check the specific rules and guidelines for the bank you choose, taking into account the fact that processes and products available might vary based on your state.

Your best bet is to look at some of the Big 4 banks, as regional banks are unlikely to allow online applications. Chase offers the option for Sole Proprietorships to apply online for their small business checking accounts. LLCs and Corporate customers will need to attend a branch to get started, though.⁴

You may also be able to apply online with Wells Fargo or Bank of America, depending on your business type, and where it is registered. You could find there are restrictions based on what sort of business you’re engaged in, but if you’re eligible, you’ll be able to complete the application form online, and scan your documents over for verification.⁵ ⁶

Banks will usually reserve the right to ask for more information, or paperwork, if they feel they need it. That means that, even if you’re allowed to apply online, you may be asked to attend a branch to provide extra documents or details. If your situation is at all unusual - for example, you have bad credit, you’re not a US citizen, or your business is not registered here in the US, the chances are that you’ll need to visit a branch to get an account arranged.

Why you need to set up a business account

If setting up a small business bank account sounds like it might be a hassle, it’s helpful to remember how important this step is, in setting up and growing your business.

For any type of company other than a sole proprietorship, it’s pretty much essential to have a separate business account. In fact, the US Small Business Administration recommends all entrepreneurs should get a business account as soon as they need to start spending or accepting payments on behalf of their company.

One important advantage of a business bank account is that you’ll maintain personal liability protection, if your own funds are kept separate from those of your business. That means that, in the unfortunate event that your business hits difficulties, your personal finances aren’t impacted.

The simple fact is that business and pleasure do not mix. Keeping your personal and business finances separate makes it easier to do your accounting, file your taxes, and see how your business is doing. ⁷ ⁸

Business bank accounts are designed with features which are attractive to company owners and entrepreneurs, such as access to credit, and merchant services. You’ll also be able to present a much more professional image to your customers by having them pay your company by credit card, wire, or check — instead of making payments to your personal account. As your business grows, your financial needs will change, and a good business account will have all you need — such as company debit cards or check books that you can allow your staff to use, or loans to help you invest and take your business to the next level.

Getting easy access to the financial services you need for your business is crucial, to save you time and money, and allow you to concentrate on what really matters. You might find you can spend more time with your customers, and less doing admin, if you get a smart and cost effective business account that you can open and operate online, like the Wise borderless account for business.

Check out the small business account options available from traditional banks, and compare the features, fees and day to day convenience of these with modern alternatives like Wise, to get the best for your business.


Sources:

  1. https://www.fincen.gov/resources/statutes-regulations/usa-patriot-act
  2. https://www.fundera.com/blog/best-places-open-business-checking-account-online
  3. https://wise.com/help/20/verification/2564086/what-do-you-need-to-verify-my-llc-in-the-us
  4. https://www.chase.com/business/checking
  5. https://www.wellsfargo.com/biz/
  6. https://www.bankofamerica.com/smallbusiness/deposits/checking-accounts/business-fundamentals-application/?sourceid=10013PRD1910010
  7. https://www.llcuniversity.com/business-bank-account-for-llc/
  8. https://www.sba.gov/business-guide/launch-your-business/open-business-bank-account

All sources checked 13 March 2019


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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