How to Open a Business Bank Account
Opening a business account is a document exercise, not a credit decision. The bank is confirming that the business exists, that you are authorised to act for it, and that it can identify everyone who owns a meaningful share. Assemble those three things and the application takes twenty minutes.
Turn up without them and it takes three weeks, which is the entire difference between a smooth opening and a bad one.
What to have ready
| Entity | What the bank wants |
| Sole proprietor | Your ID, your SSN or EIN, and a DBA certificate if you trade under a name that is not your own |
| Single-member LLC | Articles of organisation, EIN letter, operating agreement if you have one, your ID |
| Multi-member LLC | The above, plus the operating agreement and ID for each owner over the ownership threshold |
| Corporation | Articles of incorporation, EIN letter, bylaws, a board resolution naming who can open accounts |
| Partnership | Partnership agreement, EIN letter, ID for the partners |
Two additions catch people out. Banks ask for beneficial ownership information on anyone holding 25% or more of the business, because they are required to collect it. And several will ask for evidence the business is real — an invoice, a website, a client contract — particularly for a new entity with no trading history.
Detail on each item is on the documents page, and the EIN question has its own: do you need an EIN?
The sequence
- Form the entity first if you are forming one. The bank needs the state filing, and a pending filing is not a filing. A sole proprietor skips this step.
- Get the EIN. Free, direct from the IRS, issued immediately online in most cases. Do not pay a service for it.
- Pick the account against your own activity. Count cash deposits, checks and ACH items from three months of records. See the fee list.
- Apply. Online for most fintechs and many banks; a branch appointment for corporations and anything with unusual ownership.
- Fund it, then move the money over. Repoint payment processors, payroll, subscriptions and autopay before closing anything.
- Keep it clean from day one. No personal spending on the business card, no business income into the personal account.
Why applications stall
- Name mismatch. The name on the state filing, the EIN letter and the application must match character for character. "Smith Design LLC" and "Smith Design, L.L.C." will trigger a manual review.
- Missing beneficial ownership details. Every owner at or above the threshold has to be identified, including ones who take no part in running the business.
- Banking history. Banks screen against shared databases of closed accounts and unpaid overdrafts. A closure on your personal record can block a business application.
- Restricted industry. Cannabis, crypto, adult, firearms, money services and gambling get declined by most mainstream banks regardless of paperwork.
How long it takes
An online application for a single-member LLC with documents to hand is usually approved the same day or next. A corporation opening in branch is a one-hour appointment plus a few days. Debit cards arrive in one to two weeks, so do not schedule anything that depends on the card.
Related
Deciding what to open: sole proprietor vs LLC, or opening without an LLC. On keeping it separate afterwards: the risk of commingling funds.
Common questions
Can I open a business bank account online?
Yes for most sole proprietorships and LLCs. Corporations, partnerships with complex ownership, and trusts are more often sent to a branch.
Do I need an EIN?
An LLC with more than one member, any corporation, and anyone with employees needs one. A single-member LLC or sole proprietor can often use an SSN, but most banks prefer an EIN and it is free from the IRS.
How much do I need to deposit?
Frequently nothing. Traditional banks often ask for $25 to $100 to open; fintech accounts usually have no minimum.
Can I be turned down?
Yes — for prior account closures, unpaid overdrafts, incomplete ownership information, or operating in an industry the bank will not serve.
Figures and rules in this article are checked against the official sources below. Where they disagree with us, they win.
