Are you a small business owner who has had a few banking blunders in the past? If so, you may have experienced difficulties opening a business checking account. The good news is there are plenty of banks out there willing to work with you.
If you aren’t familiar with ChexSystems, it is a nationwide consumer reporting system. It has a database made up of checking account activity, such as check writing history, openings and closures of checking accounts, and any checking account applications you turn in.
When you need a personal account without restrictions, you can choose a bank that doesn’t use ChexSystems. The same applies to business checking accounts, and we’ve selected some of the top contenders out there to get you back up and running with a second chance business checking account.
The Top Second Chance Business Checking Accounts
While you can look for a local bank or credit union in your neighborhood that offers second chance business checking, the options may be few and far between. Another option is to choose an online-based bank that operates across the nation.
In-person banking may not be provided but these banks often have fewer fees since the cost of running a physical bank isn’t an issue for online financial institutions. If you’d like to open a business checking account online with no ChexSystems, the options below are a great place to start.
Open an account today!
One of the biggest challenges for small businesses, entrepreneurs, and gig workers is finding the right bank account for their growing business.
The Found Business Banking Account solves that problem by simplifying your financial journey. The sign-up process takes only a few minutes. There’s no credit check or ChexSystems.
Found Business Banking at a Glance
- No opening deposit required
- No minimum balance
- No required monthly fees2
- Free unlimited ACH payments
- Free unlimited invoicing
- Free mobile check deposits
- Free built-in expense management tools
- Accept bank transfers and card payments
- Easily connect to Quickbooks, Stripe, Venmo, PayPal, Etsy, etc.
- Get paid up to 2 days early with direct deposit1
- Send money to anyone within the U.S. using their phone number or email address
- Deposit cash at over 79,000 locations
- Access your account online or on the free app
- Found’s core features are free. They also offer two paid products: FoundPlus for $35/month or $315/year and Found Pro for $80 /month or $720/year.
Fast Approval Process
Time is money and Found respects both. Sign up for your business account online and the streamlined approval process ensures you’re up and running quickly. No lengthy paperwork needed to get swift access to your financial hub.
Easy Bookkeeping and Tax Management Tools
Managing your business finances shouldn’t be a headache. You get intuitive tools such as automated expense tracking, receipt capture, unlimited custom invoices, and the ability to manage 1099 contractor payments. Plus, you get the ability to auto-save for tax payments and automatically generate tax forms.
No Hidden Fees, No Surprises
Say goodbye to unexpected charges. Found.com believes in transparency. They’ve stripped away any required monthly fees2, leaving you with a straightforward banking experience. No hidden costs2—just clarity and peace of mind.
Found is a financial technology company, not a bank. Business banking services are provided by Lead Bank, Member FDIC.3
Novo understands small business owners and makes it easy to open and manage an account. As an online-only bank, you’ll find Novo strikes the right balance between technology, human touch, and real-world benefits. Here are some of our favorite features for Novo Business Checking:
- NO monthly fees
- NO minimum balance requirement
- NO NSF fees
- ATM fee reimbursement up to $7/month
- NO credit check or ChexSystems
- FREE Mastercard debit card
- FREE mobile app
- FREE transfers, mailed checks, and incoming wires
- FREE invoicing to create, send, and track invoices
- FREE mobile check deposit
Application Process
It takes about 10 minutes to sign up for a Novo account. You’ll need personal and business information, which may include a social security number, business tax ID, and business formation documents. They do not check your credit or use ChexSystems.
Novo is growing quickly. Their offering is popular with small business owners. The account approval process is currently taking 1-2 business days and once you’re approved, you can get full access to your account with a simple $50 deposit.
Documentation You Might Need When Opening a Business Checking Account
In most cases, banks will want to verify both the business itself and the people involved in the business through a few official documents you may be required to provide.
For many banks, a ChexSystems report may be run based on your business structure. If this is the case, it gives the bank an idea of how you’ve managed savings and checking accounts in the past.
As an example, a sole proprietor may need to provide a Social Security number that is used to pull your ChexSystems history. Corporations and limited liability companies (LLCs) will instead provide an employer identification number (EIN) instead of using ChexSystems. Below is a list of what might be required to open an account based on the type of business.
Sole Proprietor
If the name of the business is not the same as the legal first and last name of the owner, additional documentation is required. So if the owner’s name is Jane Doe and the business name is Doe’s Bakery, additional documentation is needed. However, if it’s called Jane Doe Bakery, none will be required.
Some of the extra documentation in this category that may be required include:
- Business License
- Certificate of assumed name
- Fictitious name certificate or “doing business as”
- Registration of trade name
Limited Liability Company (LLC)
One of the following documents will be needed:
- Articles of organization
- Certificate of formation
- Certificate of organization
Corporation
For a corporation, you will need one of the documents below:
- Articles of incorporation
- Certificate of good standing
General Partnership
A general partnership will need to provide one of the following documents:
- Business license
- Certificate of assumed name
- Fictitious name certificate or “doing business as”
- Partnership agreement
Basic Info for All Businesses
Regardless of the business type for a second chance business checking account, there are a few things that will likely need to be shared. These include:
- Date of birth
- Email address
- Mobile phone number
- Personal address
- Social Security number
Ideas to Improve Your ChexSystems Reports
Those with negative marks on their report may wish to open a business checking account online with no ChexSystems. However, in the following years, it can be useful to increase your chances of being accepted at other banks since this may be needed for your business as it grows.
Below are a few tips you can use to improve your ChexSystems report, so you have a better selection of options going forward:
- Request the report – Once each year, you can request a complimentary copy of your ChexSystems report. This is also known as a consumer disclosure report. You can request it from ChexSystems by phone, mail, or fax. Visiting their website will also give you the option to request a report.
- Look for errors – Once you have the report in hand, go through it and check for any mistakes. Make sure to note any information that is outdated, misreported, or otherwise incorrect.
- File a dispute – Assuming there are errors, filing a ChexSystems dispute is the best way to have these things corrected. You can choose to file by mail, fax, or online. You can have ChexSystems carry out the dispute or submit it to the supplier of the data, such as a bank or credit union.
When filing a ChexSystems dispute, make sure all important documentation is included. This might include payment receipts, bank statements, and similar items. Most investigations occur within 30 days and ChexSystems will provide the results through mail.
If it turns out there were mistakes in the report, federal law requires ChexSystems to remove these entries from it.
- Pay off debts – If the report shows that you owe money and it’s a legitimate case, it’s important to take care of those debts when possible. Whether it’s unpaid fees or overdrawn accounts, handle it when you can do so. The sooner you do so, the quicker your report can improve.
- Ask for updated records – Banks and credit unions are obliged to revise your file once a debt has been settled or paid. However, this can take time. Reach out to creditors after you’ve repaid a debt to have the files updated more quickly.
It’s a good idea to keep records of interactions with creditors and debt payments. If you find yourself needing to dispute something on ChexSystems, this will make the process much more efficient. It’s also good practice in case these documents are needed for any other purposes if you run the business.
Takeaway
ChexSystems keeps records for five years except when the person who reports it asks for it to be removed or a dispute shows that it should be taken off. If there are things you can do right now to make changes, the benefits will be immediate. However, if things are present that you cannot change, you may need to give it some time until they drop off the report.
Those who have an improved report can open any business checking account online. However, even those with issues on ChexSystems can opt to open second chance business checking accounts. Remember to check on other important factors like ATM access, transaction limits, fees, and more.
1Direct deposit funds may be available for use for up to two days before the scheduled payment date. Early availability is not guaranteed.
2Found’s core features are free. Found also offers optional paid products, Found Plus for $35/month or $315/year or Found Pro for $80/month or $720/year. Discount rates may apply. There are no monthly account maintenance fees, but other fees such as transactional fees for wires, instant transfers, and ATM apply. Read the Found Fee Schedule.
3Found is a financial technology company, not a bank. Business banking services are provided by Lead Bank, Member FDIC. The funds in your account are FDIC-insured up to $250,000 per depositor for each account ownership category. FDIC insurance only covers the failure of an FDIC-insured depository institution. The Found Mastercard Business debit card is issued by Lead Bank pursuant to a license from Mastercard Inc. and may be used everywhere Mastercard debit cards are accepted.