A current account, also known as a business bank account, is a must-have for all businesses as it enables higher number of transactions as compared to a regular savings account. This type of bank account facilitates business operations by offering overdraft facility, internet banking, easy liquidity, etc. Below, we have stated some of the major advantages of having a business current account for your small business.
Separates business finance from personal finance
When running a business, it’s essential that you do not mix up your personal and business finances and manage them separately. By opening a small business current account, you will be able to segregate your personal and business finances. Moreover, a current account will also provide you a better understanding of your business’s position and cashflow, thereby allowing you to take proactive measures to avoid significant losses.
A business current account will reflect your professionalism and seriousness towards conducting business operations. It will also play a pivotal role in enhancing the image of your business, thereby contributing to its steady growth.
A positive cashflow is essential for the growth of a business. To manage your cashflow, you can make use of the overdraft facility of the current account. The overdraft facility enables account-holders to withdraw money from their bank accounts even after the balance reaches zero. Lenders offer overdraft facilities over a pre-determined limit and also levy an interest rate on the availed amount. However, this feature of a current account can help meet the short-term monetary requirements of your business.
Ability to prove creditworthiness
If you ever require a business loan for the expansion of your business, the lender may check your creditworthiness before approving your loan application. Having a current account in the name of your business can help prove the creditworthiness to the lender. You can request your bank to provide a letter stating that you hold a current account to ease the process of availing a business loan.
Ease in banking transactions
A current account facilitates instant and hassle-free banking transactions, which is essential for running a business. Additionally, free inward remittances, easy tracking of transactions, deposits and withdrawals at any location, and personal relationship managers to address your queries are some of the other major advantages of a current account.
Here’s how you can apply for a current account and take your business to greater heights:
How to open a Current Account?
1) Visit the bank’s website and check your eligibility criteria for opening a current account
2) Download the account opening form available on the bank’s website
3) Fill up the form with necessary details. Make sure that the details entered are accurate
4) Submit the form along with the necessary documents such as KYC documents, business proof, etc. The bank will get in touch with you once your current account has been opened
To sum it up, a current account has many benefits for small business owners. The flexibility of the current account makes it an ideal bank account for business.