Updated April 13, 2022

Best Online Bank for Small Business

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The right bank for your business can help you cut fees, save time, and streamline finances. Here are the 10 best online banks for small businesses.

We need more from our banks these days. It's no longer just a place to store your money.

As technology improves, online banks have become more and more innovative. Now there are a number of banks specifically catering to the unique needs of entrepreneurs and small business owners.

Whether you're a business owner, a freelancer, or a side hustler, here are the best online banks designed just for you.

10 Best Online Banks for Small Business:

  1. Novo: For entrepreneurs who use a lot of business tools
  2. Kabbage: Highest interest rate on checking
  3. BlueVine: Well-rounded checking features plus lending
  4. NorthOne: Organizing your business budgets
  5. LendingClub: Cash back; for small businesses with $5k balance
  6. Lili: For freelancers and self-employed individuals
  7. Chase: Small retailers that also need credit card processing
  8. Axos: For small businesses with modest checking activity
  9. Brex Cash: Online-based LLCs, including those with international founders
  10. Mercury: For tech startups

1. Novo

Best for: Entrepreneurs who use a lot of business tools.

Manage your entire business life in one place with Novo. Novo is a high-tech account that lets you integrate your checking with thousands of popular business apps.

Novo pros:

  • Create up to 5 Reserves for things like taxes or big business expenses.

  • Integrate with Shopify, Stripe, QuickBooks, Xero, Zapier, Slack, and tons more.

  • >Exclusive savings from popular business services, such as $20,000 in fee-free card processing with Stripe and $3,000 in Google Cloud credit.

Novo cons:

  • No overdraft protection (fee is $27/overdraft).[1]
  • No cash deposits
  • Cannot send wires. You can only send international money transfers through the Wise integration.

Novo is technically a tech company. It partnered with Middlesex Federal Savings to provide FDIC insurance up to $250,000.[2]

2. Kabbage

Best for: Highest interest rate on checking

Want your money to work for you? Kabbage offers one of the highest interest rates currently on the market.

It also offers small business line of credit and payment processing is coming soon. With banking, lending, and processing, Kabbage could be a great choice if you're looking for multiple services under one roof.

Kabbage pros:

  • High interest rate to grow your money.

  • Set up to 5 Reserves for taxes or big business expenses.

  • Ability to deposit cash at 90,000+ GreenDot retailers (though fees apply).

Kabbage cons:

  • No joint accounts.
  • Currently no integrations with third-party tools.

Kabbage was acquired by American Express in 2020, so you know it has the backing of one of the biggest financial firms.

3. BlueVine

Best for: Well-rounded checking features plus lending

BlueVine is one of the most popular online business checking accounts for the high interest rate and excellent features.

It also offers lines of credit up to $250,000. If you may need a small business loan in the future, it could help to have a positive banking relationship with BlueVine.

BlueVine pros:

  • 1.5% APY on balances up to $100,000 for customers that meet monthly eligibility requirements.

  • Two free checkbooks

  • No fees for overdrafts or incoming wires

  • Cash deposits at 90,000+ retailers (fees apply)

  • 2 free subaccounts (they're eligible for interest too, up to $100k on combined balances across all the accounts).

BlueVine cons:

  • Requirements to earn APY
  • Very limited integrations
  • Poor app ratings

4. NorthOne

Best for: Organizing your business finances

NorthOne was created by listening to what real business owners want from their banking. It simplifies banking so you can focus on growing your business.

With a flat-rate $10 monthly fee, you get access to all features, including deposits, invoices, debit cards for multiple owners, integrations, and financial tools.

NorthOne pros:

  • Create custom "envelopes" for taxes, payroll, and other expenses.

  • Deposit cash at 90,000+ GreenDot locations (fees apply).

  • Integrates with QuickBooks, Gusto, Shopify, Amazon, and PayPal, and many more.

NorthOne cons:

  • The $10 monthly fee cannot be waived
  • No interest
  • Cannot send or receive international wires

The only fee you may encounter is a $15 fee to send or receive a wire transfer.[3] There is also a fee if you need to deposit cash at Green Dot. It's that simple.

5. LendingClub

Best for: Cash back; for small businesses with $5k balance

If you have no problem maintaining a $5,000 balance, check out LendingClub (previously Radius Bank). You can waive the monthly fee plus get some excellent perks.

LendingClub pros:

  • Unlimited 1% cashback on debit card purchases if you have an average balance of at least $5,000.

  • Ability to deposit cash in a deposit-taking ATM in either the MoneyPass or Sum Network.

  • Unlimited ATM fee rebates worldwide.

  • Integrates with Quickbooks, Quicken, and Mint.

LendingClub cons:

  • $10 monthly fee if you can't maintain $5,000 average balance.

Note: You must have an online website or social media presence to apply for an account.

LendingClub also offers SBA loans, equipment financing, and commercial real estate loans, in addition to PPP loan forgiveness.[4]

6. Lili

Best for: For freelancers and self-employed individuals

Lili is designed specifically for freelancers and self-employed contractors. It's a mixed-use personal and business checking account with budgeting and savings features. You only need your SSN to apply.

There's also a Lili Pro account for $4.99 per month.[5] You get a debit card with cashback rewards, savings account with interest, unlimited invoices, and fee-free overdraft up to $200.

Lili Bank pros:

  • Automatically set aside a percentage of income for taxes.

  • Easily sort and categorize your transactions as personal or business, so taxes are a breeze.

  • Get your direct deposit payments up to 2 days earlier.

Lili Bank cons:

  • Does not accept applications with EIN.
  • Some features (including invoicing) are only available with Lili Pro, which has an un-waivable monthly fee.

7. Chase

Best for: Small retailers that also need credit card processing

If you like the reassurance of physical branches, check out Chase Business Complete Banking.

This account has payment processing built into the checking account. It's a great choice for mobile businesses, small retailers and food services.

Chase Bank pros:

  • Get all-in-one checking plus credit card processing. It comes with a QuickAccept mobile reader that lets you take cards anywhere.

  • Competitive processing rates at 2.6% + $0.10 per swipe.[6]

  • Over 4,700 branches and 16,000 ATMs across the nation.

Chase Bank cons:

  • There is a minimum balance or other requirements to waive the monthly fee.
  • Many other banking fees like overdrafts and wires.

You can waive the $15 monthly service fee with one of the following:
  • Maintaining $2,000 minimum daily balance, OR
  • Making $2,000 in purchases on a Chase Ink Business card, OR
  • Receiving $2,000 in deposits from QuickAccept and/or other eligible Chase Merchant Services transactions

8. Axos Bank

Best for: For small businesses with modest checking activity

Axos Bank (previously Bank of Internet USA) is another popular digital bank. It offers a couple of different business checking accounts.

Axos Bank pros:

  • The Basic Business Checking account has no account minimums and no monthly fees.

  • Unlimited domestic ATM fee reimbursements.

  • First set of 50 checks free.

Axos Bank cons:

  • No physical branches

9. Brex Cash Management Account

Best for: Online-based LLCs, including those with international founders

Brex Cash is a cash management account for business owners. It's not a bank account. Instead, it's offered by Brex Treasury LLC (a FINRA registered broker-dealer and member SIPC).

It has all the features of a traditional banking account. You get unlimited free transactions every month with no minimums or monthly fee.

Brex Cash pros:

  • Includes Brex credit card that helps build business credit and earns rewards.

  • Free unlimited virtual cards to your team.

  • Integrates with business software like Gusto, Quickbooks, Xero, and more.

  • Accepts international founders with a PO Box or virtual office address.

Brex Cash cons:

  • No ATM network to withdraw or deposit cash.
  • Not available to sole proprietors. You must be a US-incorporated business and must have an EIN to apply.[7]

10. Mercury Banking for Start-ups

Best for: Tech startups; startups looking for funding

Mercury offers a banking account specifically for tech startups. Your account comes with a checking & savings account, debit card, check payments, wire transfers, and financial tools.

What's really unique about Mercury is the Raise program that connects startups to top investors. Mercury hosts a quarterly fundraising round where you have the opportunity to get your startup in front of 500+ investors.[8]

Mercury pros:

  • No monthly fees, minimums, wire fees, or overdraft fees.

  • Get exclusive discounts on dozens of business software.

  • API access for you to custom build your own banking experience.

Mercury cons:

  • Not open to sole proprietors. You need to be a US-based company and have an EIN to apply.

Before you decide online banking is the way to go, consider these downsides:

Difficult to deposit cash
A lot of online banks partner with cash deposit services (such as GreenDot). But those services typically cost $4.95 for each deposit.[9] And there is a limit, so it may take multiple deposits. Online banks are not ideal for businesses that deal with a lot of cash.

No personal relationship
As an online-only bank, you won't be able to foster a personal relationship with a banker. This can make banking feel impersonal, especially if you need help, like getting a fee waived or qualifying for a loan.

If you have a small local business in a tight-knit community, consider if your community bank or credit union may be better instead.

How to Open an Online Business Account

All the online business banking accounts on our list are super easy to open. You can open an account in as little as 3 minutes.

Generally, you just need to have a small business, be at least 18 years old, and be a U.S. citizen or permanent resident.

You will need to provide the following information:

  • Name, address, and date of birth
  • Driver's license or state ID
  • SSN or EIN
  • Business license (if your state requires)
  • Company name (if applicable)
  • Industry
  • Years in business
  • Approximate annual revenue
  • Proof of address

Depending on your business structure, you may need to upload these supporting documents:

  • Sole proprietors: DBA certificate
  • LLC: LLC agreement and Articles of Organization
  • Partnerships: Partnership Agreement and Certificate of Partnership
  • Corporations: Corporate Bylaws and Articles of Incorporation

Usually, online banks have a fast approval process. You can be approved in just minutes if everything is in order. Sometimes, the bank may ask for additional verification or information.

Bottom Line

These days, online business banks offer much better value than their physical counterparts.

Not only do online banks have less fees and requirements, they also have innovative technology to streamline your business finances. Finding the right account can make your life so much easier, giving you more time for your business.

References

  1. ^ Novo. Does Novo offer overdraft protection?, Retrieved 3/4/2022
  2. ^ Novo. Are my deposits insured by the FDIC?, Retrieved 3/4/2022
  3. ^ NorthOne. Pricing, Retrieved 3/4/2022
  4. ^ LendingClub Bank. Business lending options, Retrieved 3/4/2022
  5. ^ Lili. What is the monthly fee for Lili Pro?, Retrieved 3/4/2022
  6. ^ Chase QuickAccept, Retrieved 3/4/2022
  7. ^ Brex. What are the requirements for a Brex account?, Retrieved 3/4/2022
  8. ^ Mercury. Raise Seed, Retrieved 3/4/2022
  9. ^ Green Dot Bank. How much does it cost to deposit cash using the Green Dot app?, Retrieved 3/4/2022

Anna G is a contributing writer at CreditDonkey, a credit card comparison and reviews website. Write to Anna G at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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