Logo

5 Benefits of Opening a Business Checking Account

2 min read
GettyImages-862196618-2-compressor

You’ve probably heard the saying, “keep your personal and your business life separate.” Well, the same motto can be applied to your small business banking. When you open a business, one of your first tasks should be to open a ​business checking account. As a rule of thumb, it’s always a good idea to use one in order to keep your businesses’ money and records separate from your personal banking.

1. Clean and organized book keeping

If you mix personal and business transactions into one account, you might have a hard time trying to keep your bank statements organized and determine important business financials such as profit margin. Separating your business transactions from your personal transactions helps keep your books streamlined, clean, and organized, allowing you to have more time to focus on what truly matters – your business. Make sure to be conscious of the specific business checking account you chose to open, because not all banks have unlimited transactions and no hidden fees.

2. Accurate taxes and deductions

Separating business transactions into their own checking account doesn’t just help you organize financial records but it also helps you file taxes. Accurately filing taxes becomes harder when you mix personal expenses in the same account. If you do not file taxes accurately, you could be faced with IRS penalties. Also, you can deduct a handful of business expenses on your taxes, which will be easier to identify and verify if your accounts are separate. You must prove to the IRS that the expenses were for the business, so a business account statement supports your deductions.

3. Help protect from personal legal liability

No matter the size of your business, it could be vulnerable to legal trouble, such as a disgruntled customer or unpaid vendor suing you, or something equally challenging. If there is a liability issue with your business, one of the first things that the courts look at is if there is a business bank account and if personal funds have been co-mingled with business funds. Your personal assets might not be protected if the court determines that you’re not running a separate business.

4. Multiple business account signers

You can have multiple signers on a business checking account. In other words, you can delegate administrative tasks to allow your employees to use your business account to run bank errands, pay vendors or complete payroll. If you do allow others to use your business checking account, be careful who you give access to. Not only will they be handling your money, but they’ll also have access to personal information such as a social security number.

5. You can accept credit cards

Many customers now prefer using credit cards over cash; therefore, you limit your customer pool and potential sales when you only accept cash payments. You can set up a credit acceptance system through the bank with your business checking account or you could set up a merchant account with your business checking account.

Interested in opening a business checking account? Our Tailored Checking account is well-equipped to save you time so you can grow your business. Apply within minutes for this award-winning, interest bearing, cash back business checking account that’s perfect for startups and small businesses.

Already a Tailored Checking customer? Enable Autobooks within your online banking. At no cost to you, you can have access to our invoicing and payment technology solution where you can send professional invoices right to your customer’s inbox and receive payments directly into your business checking account.

You May Also Like

Related Resource Center
Starting a new business is exciting—and so is making money from your venture. But where will you put all your earnings and how will you pay your vendors?
Sep 18, 2022
8 min read
How to Open a Business Bank Account
With the Coronavirus still lingering here in the US, your 2020 Thanksgiving probably looks a little different than it has in years past. With many states still urging residents not to travel this holiday season, families are instead hunkering down and keeping gatherings to a minimum. When planning your meal this year, why not support a local business. Not quite sure how? Take a look at these 4 simple ways that can help make a difference in your community.
Nov 18, 2020
3 min read
small-were-open
No matter what type of online business you manage, your Ecommerce business deserves the very best when it comes to banking. You might first think of opening a business checking account with your local community bank, where you might already have a personal account opened.
Nov 15, 2020
3 min read
tiny-ecommerce-e1605662870554
You finally did it! You got your business up and running, all of that time spent planning has paid off and you are now a real business owner. You might not think opening a business checking account is a priority, but the earlier you open one, the easier your life will be down the road.
Jul 21, 2020
4 min read
GettyImages-671328436-2-1
When you start a business – whether you’re a jewelry maker selling your wares on Etsy, or a startup founder ready to break through to the next level – one of the first questions that arises is: should I incorporate as a business? Most businesses begin as a sole proprietorship. If you don’t incorporate, you are, by default, a sole proprietor. Legally, that means that you and your business are not separate entities, wherein your business is taxed at the same rate as you are personally and, if your business is sued or carries debt, your personal assets are not protected. Separating yourself from your business by incorporating or forming a Limited Liability Corporation (LLC) puts up safeguards and protects against losses from business liability. There are other advantages as well.
Jul 2, 2019
2 min read
small-business-owner-food-truck-1024x683-compressed-1
Related Impact
From groceries and diapers to Halloween costumes for pets, nearly 60% of American consumers prefer to shop online for everyday items that make life more convenient, comfortable, and enjoyable. And with rising prices showing no signs of stopping anytime soon, we’re pleased to introduce StackitTM from LendingClub Bank—a new browser extension that automatically finds and rewards eligible members with coupons and cash back for extra savings at more than 15,000 favorite online retailers.
Nov 13, 2022
2 min read
blog header stackit 765x430 v1-1
Even in today’s low-yield, high-inflation environment, it’s essential to keep a certain amount of money in an easy-to-access checking or savings account for things like daily household and emergency expenses, or to meet short-term financial goals.
Oct 2, 2022
5 min read
LendingClub Rewards Checking Nationally Certified as Trusted, Afforda
Since 2007, LendingClub has been on a mission to deliver a world-class experience to all our members. This month we took a moment to reflect on the more than four million members who have chosen LendingClub as their partner to help them reach their financial goals.
Apr 19, 2022
2 min read
Illustration of large number 4 and letter M made up of colorful, tiny illustrations of ethnically diverse people
In March 2022, we hosted our first quarterly webinar where we celebrated our one-year anniversary as a digital marketplace bank. 
Mar 6, 2022
less than a minute read
Blog-post
LendingClub completed the acquisition of Radius Bank in February 2021. At that time, in addition to the direct-to-consumer deposit business, we inherited a fintech partner program, and several lending businesses. As we reach the one-year anniversary of the acquisition, and in conjunction with the conclusion of a strategic review of our business operations, we have made the decision to discontinue certain businesses that don’t fit our mission.  
Jan 2, 2022
2 min read
Man in blue button up shirt and glasses smiling
Related FAQ's
We offer several ways for you to make your monthly auto loan payment, so you can choose the method that works best for you. A statement will be mailed to you every month that shows the payment amount and due date.
Nov 29, 2023
less than a minute read
LendingClub provides a year-end statement that summarizes your account activity, including how much interest you’ve earned and information regarding Notes tied to loans that have been charged off.
Jun 7, 2023
less than a minute read
In some cases, we may need to confirm your employment before your application can be finalized. The fastest way to confirm your employment is to provide your work email address.
Jun 7, 2023
less than a minute read
To process your application, we may need to confirm your income matches what was on your application.
Jun 7, 2023
less than a minute read
The payment transaction type (signature-based or other) is ultimately decided by the merchant and is based on how the transaction is transmitted at the time of processing.
Jun 7, 2023
2 min read
Related Glossary
{noun} A type of credit that allows the borrower to make charges and payments against a set borrowing limit, paying interest only on outstanding balances.
Sep 6, 2023
4 min read
{noun} The amount of unpaid interest that has accumulated as of a specific date, either on a loan or an interest-bearing account or investment. 
Mar 21, 2023
4 min read
{noun} The total annual cost to borrow money, including fees, expressed as a percentage.
Mar 21, 2023
3 min read
A debt that is written off as a loss because the financial institution or creditor believes it is no longer collectible due to a substantial period of nonpayment.
Feb 7, 2023
3 min read
{noun} An interest rate that remains the same for a set time, usually for the life of the loan.
Feb 4, 2023
3 min read
Change Your Money, Change Your Life
Join our monthly newsletter for tools, tips, and insights to improve your financial health.
  

LendingClub Bank and its affiliates (collectively, "LendingClub") do not offer legal, financial, or other professional advice. The content on this page is for informational or advertising purposes only and is not a substitute for individualized professional advice. LendingClub is not affiliated with or making any representation as to the company(ies), services, and/or products referenced. LendingClub is not responsible for the content of third-party website(s), and links to those sites should not be viewed as an endorsement. By clicking links to third-party website(s), users are leaving LendingClub’s website. LendingClub does not represent any third party, including any website user, who enters into a transaction as a result of visiting a third-party website. Privacy and security policies of third-party websites may differ from those of the LendingClub website.

Savings are not guaranteed and depend upon various factors, including but not limited to interest rates, fees, and loan term length.

A representative example of payment terms for a Personal Loan is as follows: a borrower receives a loan of $19,584 for a term of 36 months, with an interest rate of 10.29% and a 6.00% origination fee of $1,190 for an APR of 14.60%. In this example, the borrower will receive $18,663 and will make 36 monthly payments of $643. Loan amounts range from $1,000 to $40,000 and loan term lengths range from 24 months to 60 months. Some amounts, rates, and term lengths may be unavailable in certain states.

For Personal Loans, APR ranges from 9.57% to 35.99% and origination fee ranges from 3.00% to 8.00% of the loan amount. APRs and origination fees are determined at the time of application. Lowest APR is available to borrowers with excellent credit. Advertised rates and fees are valid as of July 11, 2024 and are subject to change without notice.

Checking a rate through us generates a soft credit inquiry on a person’s credit report, which is visible only to that person. A hard credit inquiry, which is visible to that person and others, and which may affect that person’s credit score, only appears on the person’s credit report if and when a loan is issued to the person. Credit eligibility is not guaranteed. APR and other credit terms depend upon credit score and other key financing characteristics, including but not limited to the amount financed, loan term length, and credit usage and history.  

Unless otherwise specified, all credit and deposit products are provided by LendingClub Bank, N.A., Member FDIC, Equal Housing Lender (“LendingClub Bank”), a wholly-owned subsidiary of LendingClub Corporation, NMLS ID 167439. Credit products are subject to credit approval and may be subject to sufficient investor commitment. ​Deposit accounts are subject to approval. Only deposit products are FDIC insured.

“LendingClub” and the “LC” symbol are trademarks of LendingClub Bank.

© 2024 LendingClub Bank. All rights reserved.