Having poor credit can make every task seem a little bit more daunting and impossible, even simple tasks like trying to open a bank account for your business. If you have poor credit and you also own a new business, it may seem like you are stuck between a rock and a hard place, as you do not personally qualify for a bank account and your new business may not have enough of a history to qualify for an account either.In today’s economy, banks are now often requiring people to back up their business with their own personal assets and credit. Do not be too alarmed by this news, however, as there are ways around this and to get you on your way to opening a bank account for your business and turn your credit around.
Tips on How to Establish a Business Banking Account With Bad Credit:
- One of the first things you should try to do if you are having trouble obtaining a bank account is to incorporate your business. By incorporating your business, this will establish your business with its own tax identification number. This will also remove all business assets from your personal account and thereby protect them from creditors and other future problems which may arise.
- Go in and speak to the bank where you do your personal banking. Make sure to speak to someone who deals with customer service, as they will be better able to guide and direct you and answer any questions you have. A lot of banks are happy to work with customers who they have already established a working relationship with and are more open to helping out. Even if your personal bank account is low, as long as you have not frequently over drafted your account or had insufficient funds, a bank is likely to do business with you and help you establish your business bank account.
- You may have to agree to maintain a minimum balance which is set by the bank, or is on the higher side. Or even have to agree to pledge a company asset as collateral against the account, so the bank feels more comfortable doing business with you and that they will not be taken. It is very important to remember that while this is a checking account, and not a line of credit, your bank may still want some assurances and they do have the right to ask you for them in order to use their services.
- If you are not happy with what bank is tell you, you have the power to look elsewhere. Make sure to shop around at various banks and do not settle with one until you have spoken to a few other banks to see what they have to offer you. There are a lot of banks out there who are willing to work with start up business and people who have no credit, or bad credit. It is just a matter of going out there and making sure you find the right bank for you.