What is Business Banking vs Corporate Banking?12 min read

What is Business Banking vs Corporate Banking?12 min read

When starting or running a business, one of the important initial steps is opening a dedicated business banking account. This separates your personal finances from your business finances and allows you to easily track business income and expenses. 

But what type of bank account should you choose – a business banking account or a corporate banking account? 

Let’s explore the key differences between business banking and corporate banking.

What Are the Differences Between Business Banking and Corporate Banking?

While both business banking and corporate banking cater to the banking needs of businesses, there are some important distinctions between the two:

• Customer Size and Revenue: Business banking is typically suited for smaller businesses with fewer employees and lower annual revenue, usually under $5 million. Corporate banking caters to larger companies with over $5 million in revenue, more employees, and more complex banking needs.
• Nature of Products and Services: Accounts under business banking tend to have simpler features along with basic services like checking/savings, credit/loans, payroll and merchant services. Corporate banking offers tailored, complex products including cash management, treasury services, trade finance and customized lending.
• Banking Relationships: Business banking focuses on transactional products and digital/online services with less emphasis on personal relationships. Corporate banking handles multifaceted relationships through dedicated representatives and strives to provide holistic financial solutions through investment banking tie-ups.
• Approval Process: Business bank accounts can often be applied for easily online. In comparison, getting approved for large corporate banking facilities requires extensive due diligence and may involve several rounds of negotiations.
• Lending Amounts: Small business owners can usually get term loans and lines of credit up to a maximum of $3-5 million under a business banking program. Meanwhile, corporate clients have access to much higher lending limits running into several tens of millions through customized loan syndications and structured finance products.

Which Account Should Business Owners Apply for?

Whether a business banking account or corporate banking account makes more sense depends on your company’s specific attributes and stage of growth. 

Some general guidelines:

• New businesses and ventures with under $1 million in revenue and fewer than 50 employees will be best served by a standard business banking package for startups.
• Established small businesses with under $5 million in annual sales and fewer than 100 employees can get their needs met through expanded business banking offerings.
• Mid-market companies generating $5-50 million annually, with 100-1000 employees worldwide, are candidates for a hybrid approach involving both business banking and introductory corporate banking services.
• Large corporations with revenues over $50 million, numerous global locations, and 1000+ employees require full-fledged corporate banking relationships for their scale and complexity.
• Businesses that import/export or have multinational operations can benefit from corporate banking ‘s specialized international and cash management services earlier.

Consider a business banking account until revenues exceed $1-5 million, then graduate to corporate banking as your operational footprint and finances increase in scale and complexity. Staying agile as your company evolves is the prudent path.

How to Get an Online Bank Account for Business?

Opening an online-only bank account for your business is very convenient in today’s digital world. 

Here are the basic steps:

• Choose an online bank that offers business bank accounts. Make sure they provide the essential features your company needs like checking, savings, bill pay, etc. Customer service availability should also be considered.
• Gather basic documentation about your business – details like legal structure (LLC, corporation), Tax ID number, address, authorized signers’ personal information. You may need to provide business registration or articles of incorporation docs.
• Complete the new account application online. This involves filling out forms with your company’s details and uploading any required documents. The entire process can typically be handled digitally without visiting a branch.
• Verify your identity. For security and compliance, banks will need to electronically verify who you are, using your photo ID, Social Security number, or questions to confirm aspects of your credit history match public records.
• Add funds and activate your account. Most often you can transfer money from your personal checking account to get started. From there, you have full access to manage funds, pay bills, accept deposits and more from any internet-connected device.

Following these steps means you can have a fully-functional business bank account in an entirely digital manner, without ever stepping foot inside a traditional office. 

Remote and online operations have never been more accessible.

What are the Requirements to Open a Bank Account for Business?

While requirements can vary slightly between financial institutions, most banks will need the following basic information and documentation to open a new business bank account:

• Business owners’/officers’ personal details like full name, date of birth, address, ID numbers
• Business details – legal structure (LLC, corporation, sole proprietorship etc.), business address, Tax ID number or similar business registry confirmation
• Establishment/incorporation/registration documents for your business
• Description of your company’s products/services and estimated annual revenues
• Signatures of authorized account representatives designating them as signers
• Proof of business ownership/shareholder details if it’s not a sole proprietorship
• Source of funds statement explaining where startup capital is coming from
• An initial deposit amount (often $100-500 minimum) to open the account

Gathering these foundational materials takes some preparation, but ensures compliance and helps banks properly understand your business for onboarding purposes. 

With this information in hand, accounts can usually be opened quite smoothly.

Which Bank is the Best to Open a Bank Account as a Business Owner?

There are many large national and local banks that offer fully-functional business bank accounts. However, one up-and-coming option worth strong consideration is The Kingdom Bank.

As a digital-only financial institution, The Kingdom Bank enables the seamless remote onboarding and management of business bank accounts entirely online. 

Our platform provides all the essential features like checking, savings, bill pay, transfers, and multi-currency capabilities. Where The Kingdom Bank really shines though is its accessibility for international companies through passporting regulations.

With headquarters in Dominica and full authorization across global markets, The Kingdom Bank allows business owners and entrepreneurs from any nation to easily open secure corporate banking and business banking accounts. 

Advanced tools like Virtual IBANs further streamline international payments and receivables. And with 24/7 customer support online, assistance is always available regardless of time zone.

Security and compliance are also tops with The Kingdom Bank, as we are subject to the high standards of our regulator in Dominica. 

Funds are fully insured for safety as well. Perhaps most notable is our incredibly affordable pricing – with no monthly account or transaction fees whatsoever for standard business banking activities.

For companies looking to establish themselves globally or merely seeking a premium yet competitively priced digital banking solution, The Kingdom Bank offers a very compelling value proposition worth serious consideration. Signing up is completely paperless and straightforward too.

Choosing the right banking partner is an important early step for any business. Evaluating your needs objectively will help decide if traditional business banking or advanced corporate banking is the best fit initially. 

Then exploring fully-digital, passporting options like The Kingdom Bank could unlock new opportunities internationally at very attractive price points. Now is an excellent time to research and find the ideal banking platform to catalyze your company’s growth globally.