If you’ve ever applied for a bank account, you may already know that a credit check is part of the process. Most U.S. banks use a database known as ChexSystems, which is a nationwide credit reporting agency that tracks consumer banking history.
For a small business, this can be an issue. You may find it difficult to open a business bank account if you have a checkered banking past. This can cause delays in opening a business bank account, or even prevent it altogether.
Where to Open a Business Checking Account with No ChexSystems
Although most banks use ChexSystems, not every bank in the U.S. does. A bank that doesn’t use ChexSystems can be a great option if local banks and credit unions aren’t likely to approve you for a new business checking account. Here are six banks that don’t use ChexSystems:
1. SoFi Checking & Savings
SoFi is an online-only bank that doesn’t have a dedicated business bank account option, but its online checking account could fill all your needs. With SoFi, you get no-fee checking with up to 0.50% APY on checking balances and 4.60% APY on savings accounts. The signup process takes minutes and requires no ChexSystems check.
When you use your SoFi debit card, you can get up to 15% cash back at select stores. SoFi also provides FDIC insurance which safeguards your money up to $2 million. Additionally, if your account goes negative, SoFi will back you up for up to $50 without any fees, provided you maintain eligible direct deposits.
Newcomers to SoFi are offered a bonus between $50 and $250 based on the amount they arrange for direct deposit. Additionally, you can use more than 55,000 Allpoint® Network ATMs for your convenience.
Fees:
- No monthly fees
- No overdraft of NSF fees
- Fee-free ATM access at 55,000+ Allpoint ATMs worldwide
Requirements:
- No opening deposit required
- No minimum monthly balance required
Business-Friendly Features:
- Bonus of up to $250 with direct deposit
- Access to direct deposits up to two days early
2. Chime® Checking
Chime Checking is a mobile banking app that can also work for small businesses. There are no account fees or balance requirements, and you can even earn 2.00%3 interest on your money8.
The signup process is fairly straightforward, taking only minutes and not pulling a report from ChexSystems. But since Chime doesn’t offer business checking accounts, you won’t get any of the business-friendly features that come with business checking accounts.
Fees:
- No service charge
- No overdrafts fees5
- Fee-free1 ATM access at MoneyPass ATMs in a 7-Eleven location or any Allpoint or Visa Plus Alliance ATM
Requirements:
- No opening deposit required
- No minimum monthly balance required
Business-Friendly Features:
- Access to direct deposits up to two days early2
- Secured credit card can help you build credit
- Earn 2.00% APY on your balance
3. Novo Business Checking
Small business owners have realized the many benefits of online banking in recent years. They offer competitive rates, tempting perks, and flexible approval processes for loans and business bank accounts.
With Novo, you can get an online business checking account without the ChexSystems approval process. Best of all, you can apply for a business bank account in less than 10 minutes.
Fees:
- No monthly fees
- All fees for ATMs reimbursed
Requirements:
- $50 opening deposit (recommended)
- No balance minimums
Business-Friendly Features:
- Both virtual and physical debit cards
- Free ACH, mailed checks, and incoming wires
4. Bluevine Business Checking
Bluevine is designed for business banking, with minimal costs and no monthly fees. You can apply online in minutes with no ChexSystems or credit check required.
What’s really great about Bluevine, though, is that it makes record keeping easy. Your business checking account can connect to your QuickBooks Online account to ensure that when you pay vendors or transfer funds, it’s recorded. If you maintain a $250,000 minimum balance, you may also qualify to earn 2.00% interest.
Fees:
- No monthly maintenance fees
- No fees for overdrafts
- No in-network fees for ATM use
- Out-of-network fees for ATM use not reimbursed
Requirements:
- No opening deposit required
- No balance minimums
Business-Friendly Features:
- Earn 2.00% APY on balances of $250,000 or more with minimum monthly debit transactions
- Integration with QuickBooks Online
- Bill pay dashboard makes online payments easy
5. Capital One Business Basic Checking
Capital One is one of the bigger banks that doesn’t use ChexSystems for new account applications. This gives you all the amenities of a national bank without the strict application requirements. With a Capital One Business Basic Checking account, you get the benefits of in-person service at Capital One branches nationwide, as well as online banking services both on the web and in an app.
If you regularly deal in cash, Capital One may win out over other options. You can deposit up to $5,000 in cash each month for free, with each additional cash deposit only costing $1 per $1,000. The ease of being able to walk up to a teller can make the extra fees worth it.
Fees:
- $15 monthly fee on balances of less than $2,000
- Access to fee-free cash withdrawals and deposits at all Capital One ATMs nationwide
Requirements:
- No opening deposit required
- No minimum balance required
Business-Friendly Features:
- Access to in-person service and fee-free ATM use at Capital One locations
- Up to $5,000 in free cash deposits each month
- Free ACH deposits and electronic bill pay through web and app
- Overdraft protection with linked Capital One Business deposit account
6. FSNB
Originally created to serve the military community, FSNB or Fort Sill National Bank, has expanded to provide banking to the wider consumer market. There are branches across the eastern half of the United States, spreading from Texas all the way to Delaware.
If you can maintain a $100 monthly balance, you can avoid the monthly fee. You’ll also need direct deposit to qualify. The benefit of FSNB is that you’ll have access to local branches and ATMs, which will save on those fees, provided you have an FSNB presence in your town.
Fees:
- No monthly fee with direct deposit
Requirements:
- $100 to avoid the $6.50 fee each month
- $5 to open a business checking account
Business-Friendly Features:
- Savings round-up puts money in savings with each purchase
- Credit-building credit cards available
Second Chance Business Checking Banks
In addition to deposit accounts with no ChexSystems or credit check in place, there’s another option. Some banks still use ChexSystems but are more flexible on the requirements. Those can fall under the header of second chance banks.
Second chance banks are willing to waive the ChexSystems clearance to issue either a personal checking account or a business checking account. Some of these banks also offer lower rates and balance minimums, so check with each bank to see if their standard terms can be negotiated.
1. Wells Fargo Business Checking
While Wells Fargo Small Business Checking runs accounts through ChexSystems, the bank has second-chance checking accounts that can help small business owners qualify. If you have a branch in your town, this could be the perfect option for your small business.
With Wells Fargo’s business checking account, you can avoid the $10 monthly fee by maintaining a balance of at least $500. Provided you have an ATM near you, you can also save on cash withdrawals.
Fees:
- $10 monthly maintenance fee for balances under $500
- Free ATM access at more than 12,000 locations
Requirements:
- Minimum $500 balance to avoid a $10 service fee
- $25 minimum opening deposit
Business-Friendly Features:
- Brand your debit cards with customization
- 24/7 fraud monitoring and alerts
2. Woodforest National Bank
Woodforest National Bank started as a community bank, but it has grown by leaps and bounds in recent years. The bank has more than 760 branches in 17 different states, along with online offerings to go with it. If you live in one of those states, you can open a business checking account and combine online banking with what you can do at a local branch.
Although Woodforest does have a second chance account, it doesn’t come with the amenities you’ll get from some online-only options. Woodforest charges a monthly fee, as well as an account setup fee and a fee for overdrafts.
Fees:
- Monthly fee: $9.95 with direct deposit or $11.95 without
- $9 account setup fee
Requirements:
- $25 minimum opening deposit
- No minimum balance requirements
Business-Friendly Features:
- Free ATM use at Woodforest ATMs
- In-person service at Woodforest branches
How to Choose the Best Business Checking Account Online With No ChexSystems
When looking to open a new bank account for your business, bypassing ChexSystems can be a primary concern for many. Identifying the best business checking account tailored to your needs is essential. Here’s a roadmap to help you make an informed decision:
Determine Your Business Needs
The specifics of your business operations will determine which account suits you best:
- Transaction volume: Does your business have a high number of monthly transactions? Some business accounts offer unlimited transactions, while others have transaction limits and may charge fees beyond a set limit.
- Cash management: Businesses handling a lot of cash should prioritize accounts that offer accommodating cash deposit terms and convenient deposit facilities.
- Digital and electronic payments: In this digital age, it’s vital for businesses to have an account that supports a broad spectrum of electronic payment methods without incurring hidden fees.
Evaluate Access to Financing Options
Some of the best business checking accounts come bundled with additional financial tools:
- Business loans: You may want to choose a bank that provides a range of business loans. This can be beneficial when you’re looking to expand, invest in new resources, or manage your cash flow more effectively.
- Business credit cards: Having a beneficial business credit card can be a game changer. It can assist in expense management, offer rewards, and sometimes provide a necessary short-term financial buffer. Make sure the bank’s credit card offerings align with your business activities.
Review Additional Features and Services
Modern business banking goes beyond just transactions:
- Integration capabilities: An account that integrates smoothly with third-party tools, be it for accounting, CRM, or inventory management, can offer significant operational advantages.
- Mobile banking: The ability to manage finances, pay bills, authorize transactions, or even apply for loans on-the-go is a significant advantage in today’s fast-paced business environment.
Compare Fees and Costs
Before you open a business bank account, compare different banks for fees and rates:
- Maintenance fees: Some banks charge a nominal monthly fee for the privilege of holding an account. Often, these can be waived under certain conditions, like maintaining a minimum balance.
- Transaction fees: Different transactions might carry varying fees. Being aware of these can prevent unexpected costs down the line.
- Overdraft and protection fees: It’s vital to understand how a bank handles overdrafts and what protective measures they offer, even if they come at a cost.
- ATM fees: Withdrawing from ATMs not owned by your bank might attract fees. Some banks, however, offer a reimbursement on these fees up to a specific limit.
- Wire transfer fees: Transferring money, especially internationally, often comes with a fee. The rate can vary based on destination and amount.
- Minimum balance fees: If the account has a minimum balance requirement, dropping below this threshold can result in additional charges.
What is ChexSystems?
It is standard practice for lenders to run a credit check and view your credit report to review your credit history when you apply for credit. However, banks are more concerned about your history as a bank customer. This can be an indicator of the risk you’ll pose as a new account holder.
When you’re applying for a deposit account at a bank, decision-makers will look at any negative activity on your ChexSystems report. This can include items like:
- Forced account closures
- Overdrafts
- Unpaid negative balances
- Account abuse including fraudulent ATM and card use
- Potential fraud or identity theft
- Recent account applications
Negative activity remains on your report for five years unless the entry is removed by the original source or ChexSystems is required to remove it by law. As with a poor personal credit history, though, a ChexSystems issue can delay your plan to set up a business account.
How does ChexSystems affect small business banking?
Having a business bank account is crucial for operating a small business. Even solo entrepreneurs need to keep their personal and business transactions separate, especially when it comes to tax matters and paying employees.
When you attempt to open a business bank account, financial institutions often refer to your ChexSystems report. By providing your name and Social Security number, the bank assesses your personal banking history linked to that number.
A negative ChexSystems report can lead to a denial of the account application. However, if this happens, don’t despair. There are alternatives, like banks that don’t use ChexSystems or those offering second-chance checking accounts. It’s essential to be informed and identify banks that don’t review your ChexSystems report or require credit checks.
How to Know If You’re in ChexSystems
The Fair Credit Reporting Act allows you one free copy of your ChexSystems report every 12 months. You can request a copy of your report by simply completing this form.
If you aren’t sure what your report might say, reviewing it can be a great proactive measure. This will help you determine whether banks might see you as a risky depositor.
How to Recover From a Negative ChexSystems Report
If you’re denied credit due to a bad credit history, your first step should be to review your credit report. The same advice goes for your banking history. You can dispute items on your ChexSystems report as you would with an inaccurate credit report entry, and request that a financial institution correct them.
Request a Copy of Your ChexSystems Report
You can get one free copy of your ChexSystems report each year. If you’ve been denied a bank account, you can request a free copy.
Your ChexSystems report will show credit inquiries, check cashing inquiries, and security freezes. Financial institutions want to see your history of opening and closing accounts, as well as unpaid fees and negative account balances.
Request Financial Institutions to Update Their Entries
Financial institutions can withdraw negative information at any time. If you see something on your ChexSystems report that’s incorrect, reach out to the bank and ask that they make the correction. If you can’t gain traction from that angle, you can go directly to ChexSystems to get it corrected.
Dispute Incorrect Entries
Although ChexSystems encourages you to reach out to the bank or credit union first, they will contact them on your behalf if necessary. To start this process, first gather all the information you can to state your case. This can include:
- Account statements
- Police reports
- Settled in full letters
- Identity theft affidavits
Give It Time to Clear Your Report
The bank can request an entry be removed, but it may still take time. If you go through ChexSystems to dispute it, there will be an investigation. That process takes 30 days, but if you’re in Maine, it can be turned around in as few as 21 days.
Other Options for Banking Customers
Choosing from the best non-ChexSystems banks or second-chance accounts aren’t your only two options. There are a few other options to consider for your business checking account or savings account.
Local Banks and Credit Unions
National banks typically have policies when it comes to approving customers for business checking accounts. But you likely have a local bank in your community that can make decisions on a case-by-case basis. Many of these banks are dedicated to supporting the community, so being a locally owned business can work in your favor.
Credit unions are another consideration. At one time, you had to be a member of a designated group, such as the military or a vocational group, to qualify, but today, many credit unions are available to everyone.
Here are some credit unions that don’t use ChexSystems to qualify new account holders.
- Navy Federal Credit Union: Navy Federal doesn’t use ChexSystems and offers a small business bank account with no monthly fees and 0.01% APY on your balance.
- Southwest Financial Credit Union: This Texas bank has gone 100% virtual, and applicants aren’t passed through ChexSystems for approval. You can choose from a variety of checking account types, including free checking and high-yield checking.
- Unify Financial Credit Union: With locations in 17 states, this credit union waives ChexSystems checks on account applicants. The Right Start Checking account is designed for those who are new to banking or need to rebuild a positive checking account history.
- Hope Credit Union: If you’re in the South, Hope may have a branch near you. There’s no ChexSystems check to apply, and you’ll enjoy 3.00% APY on your checking account balance. The account also comes with no service fees and no minimum account balance.
Secured Credit Cards
Although you’ll likely need a checking account to qualify for any credit card, if you have a poor personal credit score, it can help get you on the right track. With a secured card, you pay a deposit that “secures” the money you spend on your card. Then, as you swipe the card to pay for purchases, you start building a history that will help you qualify for credit in the future.
Here are a few secured credit cards you can get without a bank account:
- OpenSky Visa: With no credit check required, this card is ideal for those without checking accounts. You’ll need to pay a $200 deposit, which you can pay by money order or a Western Union funds transfer.
- First Progress Credit Cards: First Progress has three credit cards for those who have poor credit. Each card requires a deposit of at least $200, which you can pay using a prepaid debit card.
- Self Credit Builder Secured Visa Credit Card: This card goes with a Self Credit Builder account. With each payment you make, you’ll be working toward improving your credit score. You’ll need to first have a Self Credit Builder account and demonstrate that you’re an account holder in good standing.
See also: Best Secured Credit Cards of 2023
Prepaid Debit Cards
As payment technologies have advanced, it’s become harder to pay using only cash. The good news is, there’s a lot you can do without a business bank account, including purchasing prepaid debit cards. You can use a prepaid debit card at cash registers and online, with the merchant seeing it no differently than if you’d used a debit or credit card.
With a prepaid card, you can hand over cash in exchange for a physical card that you use for online or in-person purchases. You can buy prepaid cards at most grocery stores and drugstores, then reload it with cash as needed.
See also: Best Prepaid Debit Cards of 2023
Payment Apps
Yes, you can sign up for some payment apps without a business bank account. PayPal and Venmo will both allow you to sign up without a card. The problem is, if you want to send money to someone, you’ll need to actually have money in the app first. There’s no external payment source to move funds back and forth.
That’s where a prepaid debit card can come in handy. You can add cash to the debit card in person, then link that card to your payment app to make payments. This will cover you for those situations where you need to send money to a friend or you want to buy something online without giving your debit card number.
Taking a look at your ChexSystems report can help you determine whether you’ll face challenges when you apply for a business checking account. If you see negative items, though, you can find a bank that is more flexible in qualifying applicants so that you can start rebuilding your banking record.
Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A.; Members FDIC. Credit Builder card issued by Stride Bank, N.A.
1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.
2. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. Chime generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.
3. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is accurate as of May, 22, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.
5. Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third-party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.
8. A Chime Checking Account is required to be eligible for a Savings Account.
