Financial stability is the most important component of a thriving business. It’s generally the motive behind starting a business in the first place and the determining factor between success and failure.

Mismanaged finances add unnecessary confusion to the day to day operations of a business and can be dangerous to its long-term success.

On the other hand, using the right financial products can assist in avoiding financial missteps, and result in significant benefits that help save money, time, and stress down the line.

Do I Need a Small Business Bank Account?

If you've incorporated your business (through Founded for example), opening a business bank account is mandatory, as you'll need an account to accept payment in your company's name.

If you operate as a sole proprietorship or partnership, opening a business bank account isn’t mandatory, but it’s definitely recommended.

Accounts that separate business finances from personal ones can help keep your finances organized and come in handy if you need to create a new budget or reconfigure an old one.

Keeping all business expenses in the same chequing account or savings account will make finding and organizing your expenses a seamless process.

Separating finances comes in handy during tax season, and more so in the event of an audit by the Canada Revenue Agency (CRA). It can also help you keep track of what you’re spending, without needing to manually separate every transaction.

Small Business Bank Accounts

Every business needs access to a financial institution. A chequing account or a savings account helps keep a business running, and allows owners to conduct daily financial activities, such as paying bills, issuing payroll, and purchasing supplies, for example.

Many banks, independent lenders, and credit unions offer financial products that are suited for specific businesses and industries.

When looking for chequing and savings accounts for small businesses, there are a few things to consider:

Monthly fees

  • Financial products for small businesses come with an array of options and benefits that offer flexibility for all types of businesses. Of course, rarely do they not come with a monthly cost. Consider how much you’re willing to spend on a business bank account.

Transaction limits and payment processing

  • Like a personal chequing account, small business accounts come with their own transaction limits. Depending on the number of point of sale transactions that you make, choosing an account with transaction limits that account for your needs can save you money and time.
  • Processing payments can become a costly. Consider finding a bank account that offers unlimited payment processing options.

Branch access

  • Business owners often need to make in-branch appearances to do business, like withdraw or deposit large amounts of money. If you value the option of using a branch service, a traditional bank account would be more suitable over a digital bank.

Your business might not need to access a branch or even use cash to conduct business. If this sounds like something that resonates with your business, consider working with a digital bank. Digital banks operate either entirely or almost entirely online, meaning branches will either not exist at all or limit in number.

Accounts offered by online banks are usually free but offer only basic banking features. They’re still a suitable option for sole proprietors who do most or all of their business online, such as e-commerce businesses or freelancers, for example.

Small Business Credit Cards

Business credit cards have the potential to offer benefits to business owners who find themselves making purchases regularly.

Like a chequing and a savings account, a dedicated credit card for your small business can keep your earnings organized and make keeping track of expenses much more manageable.

Considering perks that come with a business credit card is also an essential aspect of choosing a credit card for your business. Points can earn you some notable personal or business-related perks.

If you happen to make frequent purchases at a place of business that offers collector points with a specific credit card, you might want to consider a credit card that offers points on every dollar spent.

The Bottom Line

Being your own boss and running a business is challenging but choosing the right products from financial institutions can pay dividends in the long run, both financially and for your peace of mind.


Guest post by Zack Fenech, Content Writer at Ratehub.ca. Ratehub.ca is Canada’s leading comparison site for mortgage rates, credit cards, bank accounts, investing products and insurance rates.