Can I open a business bank account with bad credit?
While opening a business bank account with bad credit is possible, it may limit your options. In particular, getting overdraft protection, a line of credit, or a business credit card would be challenging. Your banking history is also a major factor for most business checking account applications.
Keep a close eye on both your personal and business credit reports. A business account can be denied because one of the people on the account has poor credit or a history of checking account issues.
A business credit score of 80 or personal credit score above 700, along with a reliable source of income, is usually the minimum to secure a business loan. However, some companies don't consider your credit score at all in the underwriting process. These lenders pay more attention to your company's sales and revenue.
| Account | Annual Percentage Yield | Monthly Maintenance Fee |
|---|---|---|
| Navy Federal Credit Union Free EveryDay Checking | 0.01% | $0 |
| Capital One 360 Checking Account | 0.10% | $0 |
| Chase Secure Bankingâ„ | N/A | $4.95 |
| Chime® Checking Account | None | $0 |
No, you cannot open a business bank account with an employer identification number (EIN) only. You'll also probably need other business paperwork — like your business license and formation documents — plus personal identification like a driver's license.
The bank checks your business credit.
If you're just starting a business, you may not have established business credit yet. However, if you have a poor business credit score or ChexSystems rating, banks may be reluctant to work with you.
Application Declines Can Stem from Bad Credit, Tax Liens, Prohibited Business Types and More.
While LLCs can be started at any credit level, there will be some notable disadvantages for business owners who have bad credit. Here are a few examples: Money will be hard to come by.
- The address and phone number of your company.
- The name(s) of the people who will be listed as account owners.
- Personal identification such as your driver's license.
- Documentation that proves the existence of the business. ...
- The bank's minimum deposit amount.
Will Lenders Always Consider My Personal Credit for A Business Loan? Most lenders will at least look at your personal credit history when determining your eligibility for a business loan. However, some lenders will put less weight in your personal score than others.
Can I open a bank account with 500 credit score?
Don't worry—while it can be more difficult, it is not impossible to get approved for a new bank account with bad credit. A bad credit score is considered a VantageScore® of 600 or lower and a FICO® score of 670 or lower.
| Account | Approximate time to complete application |
|---|---|
| Varo Bank Account: Best for Cash Advances | 2 to 3 minutes |
| SoFi Checking and Savings Account: Best for Member Perks | 1 to 3 minutes |
| Wise: Best for Non-Residents | 1 to 3 minutes |
| Chime® Checking Account: Best for Bad Credit | 3 to 4 minutes |
| Bank / Credit Union | Forbes Advisor Rating | Learn More CTA text |
|---|---|---|
| Capital One 360 Checking Account | 4.5 | |
| Chime® Checking Account | 4.4 | Learn More |
| LendingClub Bank Rewards Checking | 4.2 | Learn More |
| Varo Bank Account | 4.1 | Learn More |
In some cases, corporate credit cards don't require an SSN, meaning you can get business credit cards with an EIN only. The Brex 30 Card allows applications without an SSN. Be aware, though, that it requires a linked business bank account with a minimum $50,000 balance, so it won't be a fit for all small businesses.
However, a business checking account for your LLC can also offer a range of other benefits. Even a basic business banking account can offer lines of credit, invoicing services, and more. A business checking account might also come with merchant services, while a savings account can help your money grow.
An EIN allows your business to operate under a Tax ID number that is separate from your personal SSN and can help protect your online privacy and personal identity from criminals. Sole Proprietors can certainly be formed and function without EINs, but it's likely that you'll need to apply for an EIN at some point.
Banks conduct thorough checks on the business, its nature, and the individuals involved, which can make the process lengthy and complex, especially for non-residents or high-risk businesses.
Businesses should aim to save 10% of their monthly profits and collect 3-6 months' expense costs. Business savings accounts allow you to grow your savings with interest, create liquid assets, be FDIC-insured, be risk-free, help cover tax expenses and provide a financial cushion.
- Generous account limits, easy application. Bank of America® Business Advantage Fundamentals™ Banking. 4.5. ...
- Full-service business banking. Chase Business Complete Bankingâ„ 4.5. ...
- Non-bank option for small businesses. Bluevine Business Checking. ...
- High yield business checking. Grasshopper Business Checking Account.
Most banks don't often run a credit check to open a business checking account — but they will likely run a ChexSystems report.
What is a second chance bank account?
Second-chance checking accounts allow those who have been denied a traditional account to open a specialized one to help them build a strong financial foundation. Financial institutions offering second-change checking accounts include Capital One, Chime, GO2bank, GTE Financial, Fifth Third, Varo and Wells Fargo.
How long does it take to open a business bank account? Provided you have all your paperwork in order and good financial standing and credit history, you could get approved to open a business bank account same-day (if going to the bank in person) or in as little as 10 minutes when doing it through online banking.
- Get an employer identification number (EIN) from the IRS for your LLC, ensuring it's separate from your personal social security number.
- Open a business bank account in the LLC's name and use it exclusively for business transactions.
How does an LLC affect a credit report? If your LLC has debts taken out in the company's name, only the LLC's business credit report will be impacted by whether you repay your debts on time. An LLC loan will only impact your personal credit if you cosign or guarantee it.
As a business owner, you probably know that your personal credit score is important. But what you may not know is that your business has its own credit score — and it could be impacting your ability to secure funding and increase sales.
