Opening a business bank account is an important step when starting a sustainable business which you hope to grow sustainably over time. If you have a side hustle or have just started your business, you might think that this is complicated by administration and extra bank charges. However, there are great benefits to having a business bank account, especially if you are a small enterprise hoping to grow and scale.
As the world moves to a more cashless society, having the resources for credit facilities is important. Transactions for credit cards can only be done through a commercial account, hence having a business account opens you up to a bigger client/customer pool. This is important when thinking of growing your business as well as building a relationship with financial institutions to gain credit and expand as your business grows. Other important benefits are:
- Keeps your financial records organised;
- Makes taxes and deductions easier and less administratively intensive;
- Allows you to accept credit card payments and thereby expanding your market; and
- Allows multiple people that you authorise to use the account.
A business account makes your business more professional and legitimate when dealing with clients/customers, as well as with suppliers. It reduces the complications and administrative chaos of having to do your taxes and deductions. It allows for all transactions to be filtered as a separate business entity, thereby reducing your legal risks (depending on how you registered your company too).
It is normal to want to stick with a banking institution you know, but the bank you use for your personal banking may not suit your business banking needs. It’s important to assess and understand what small business banking packages some banks have to offer. You should also understand your business needs and what financial habits and transactions will suit your business. Some questions to think about are:
- Would you just need a simple cheque account for daily transactions?
- Do you need a small business loan or overdraft facilities?
- Would this account allow for scalability?
- Would you need a bundled (packaged) account that is preassembled with savings and business credit card facilities?
- Does this bank offer competitive bank charges and interest rates?
- Does this bank offer enterprise development networking opportunities for small businesses? i.e. offer good support, training or advice on enterprise development?
After asking yourself these vital questions, you can be confident in knowing what your priorities are when looking for a bank that matches your business needs on an operational level but also when thinking about scaling.
We have listed some banks that offer competitive business banking options for you to assess.
Absa Group Limited
The Absa Group Limited offers accounts focused on small businesses and start-ups in South Africa. Their popular classic option follows a pay-as-you-transact pricing and offers free inter-account transfers and internal debit orders. Additional benefits include the ability to build a credit record. You can start your credit history by adding a business overdraft facility and making use of the interest rate tailor-made based on your business’ risk profile. Access to Enterprise Development Centres. As well as electronic banking access. There are many other accounts including Shari’ah compliant Islamic Business Accounts, Attorney Trust Accounts and more comprehensive Essentials Packages. In order to find additional information on rates and fees, please contact an Absa Branch nearest to you.
Capitec’s Global One account
Having a Global One debit or credit card provides you with many ways to access funds and transact worldwide through a dedicated banking app and internet banking. They offer zero purchase fees worldwide when using your card. Their minimum account balance is highly accommodating at only R25 and their monthly subscription fee is only R5. In order to get more information on costs for transfers and withdrawals and rates by contact a Capitec Branch nearest to you.
First National Bank’s First Business Account
The First National Bank’s First Business Account is described as a perfect start for the digitally savvy sole proprietor. The digital solution also includes some additional benefits such as:Zero monthly fees and unlimited free card swipes. Fast payments with QR Speedpoint® available on the FNB App. Access to a business coach is available through Fundaba on the FNB App. There are also Gold, Platinum and Enterprise Business Account options available for more established business. You can use this selection guide as well the bank’s pricing guide to help you work out which option is best suited for your business.
The Nedbank-Ecobank Alliance is dedicated to enabling small business growth. This is evident through the creation of SimplyBiz, a network of like-minded entrepreneurs and resource pools that provides useful support on a variety of business solutions.
With Nedbank, you have the option of signing up for an account on a pay-as-you-use basis or for a flat monthly fee and various other business bundles. They also offer solutions for daily transactions, loans, investing as well as specialized solutions.
Standard Bank’s BizLaunch Account
The Standard Bank’s BizLaunch Account gives customers the functionality of a standard current account with the added benefit of bundled pricing at a reduced monthly fee for the first 12 months. They offer a wide array of business accounts depending on the stage of your business. They provide tools such as Snapscan, which makes cashless transactions easier as well as provide expert help through their consultants who are experts across various sectors. This allows secure online banking with added benefits of UCount rewards, traders club to grow your money, and dedicated support from the Bizconnect resource pool might make this an attractive option.
Sasfin is an independent banking and financial services group. Their business accounts aim to provide easy cash management for entrepreneurs with access to a range of features. You can earn up to 2% interest on your transactional account balances and the bank’s digital platform called B\YOND. With it you get access to XERO, a software where you can perform payroll management, send personalized quotes and invoices, set up classifications as well as transaction tags for tracking and much more. For more information on their business banking here is a link to their brochure which gives more information on rates and fees.
Now that you have an idea of what options are available to you, depending on what type of business you registered on the Companies and Intellectual Properties Commission (CIPC), you will need the following documents:
- If you’re a Sole Proprietorship: identity document; two trade references; tax number
- If your business operates as a CC (closed corporation): founding statement; Certificate of Incorporation; identity documents of each member; two trade references
- If your business operates as a PTY (Ltd): Memorandum of Incorporation; Certificate of Incorporation; identity documents of shareholders/directors
When going to the bank take the above documents, your South African ID/ Valid Passport, Proof of business Address and Utility bill (not more than three months old), CIPC registration and some money for your minimum opening balance with you to the bank and get signing.
It’s important to know your business needs to be able to distinguish what banking service will best suit your objectives, business goals and long term vision. So after doing research (like reading this article) speak to a bank representative and get signed. Seeing your business grow through eliminating pain-points early on will reap great rewards and make the entrepreneurial journey a little less stressful than what it already is.