Benefits of Business Bank Accounts for a Home-Based Business
What are some important things to think about when starting a home-based business? One thing I would recommend is getting a dedicated business bank account.
At any point after getting your business licensing in place, you should consider opening a business bank account. You will need to have a business license and a tax ID to establish the account. A lot of people try to use their personal accounts for their home-based business, but that's not really a good idea. There are several reasons why a dedicated bank account for your business is a smart idea.
1. Partition finances
Getting a dedicated bank account for your home-based business will help separate your business finances from your personal finances, which is a very smart business practice. This is particularly important if you form an LLC or corporation.
2. Features
Generally, there are extra perks available with business bank accounts. These might include interest checking, a built-in credit line, and a built-in savings account or money market account.
3. Support
Usually, there's better banking support for business accounts. Banks normally have a separate division dedicated to providing phone support for business accounts. In addition, there are usually in-bank specialists who are designated for business accounts.
4. Credit
Often, a business bank account will have a business credit card or credit line associated with it. Usually these credit accounts are on a calendar monthly cycle and often have 20- to 25-day grace periods on paying. This can be a source of cheap, short-term financing.
So if you're planning to start a home-based business, don't forget a dedicated bank account.
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