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How Can I Open
A Business Bank Account?

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    Why Having a
    Business Bank Account
    is Important

    If you’re an entrepreneur or small business owner in South Africa, having a business bank account is a must. A good small business banking solution gives detailed insights into your finances, can help with the funding application process, and allows you to keep a healthy cash flow. 

    But which business bank account should you choose? And how can you open a business bank account that fits your business’s financial needs?

    Finding and opening the right business bank account can be hard for small businesses in South Africa, especially because of:

    • Paperwork often needed to qualify for a business bank account, like tax clearances and proof of funds.

    • Time-consuming applications
    involving visiting local bank branches, signatures, and waiting for approval. 

    • Stringent requirements for additional financial services like access to credit and other types of funding.

    Having these financial services at your disposal is important because running a small business in South Africa is challenging no matter your type of business. 

    Price hikes, logistics disruptions and labour strikes are just some of the economic uncertainties business owners deal with on a daily basis. Lack of access to business funding only aggravates all these issues – yet only a fraction of small businesses use traditional banks for their business needs. Fortunately, alternatives that can cater to both business banking and funding needs are becoming more popular and accessible. 

    With business loans inaccessible to many, 35% of South African small businesses rely on personal loans with poor repayment terms and low loan amounts.

    But you don’t have to. With Lula’s fast, simple and fully digital funding application process, we’ve made growth for South African small and medium-sized enterprises easier than what traditional banks offer.

    What’s more, with one of our Business Banking accounts, we’ve removed the need for you to submit your bank statements every time your apply for funding with us – making the process that much more seamless.

    Let’s explore how to open a business bank account so you can optimise your finances and build a more resilient and profitable business. 

    How Can I Open A Business Bank Account?

    How Can I Open A Business Bank Account? 

    South Africa is a hotbed of opportunity for small businesses. Small to medium enterprises make up 98% of the country’s registered businesses. If you run a small business or are an entrepreneur thinking of starting a new business, you should open a business bank account in South Africa to transact and access day-to-day financial services.

     But how do you open a business bank account?
    Here’s a step-by-step guide to help you get started:

    1. You can register your small business online in minutes 

    With Lula, to open a Free Business Bank Account as a sole proprietor, your business does not need to be registered. However, when upgrading to an Unlimited Business Bank Account, you first need to make sure your business is registered as a legal entity. You can register a corporate entity at the Companies and Intellectual Property Commission (CIPC). 

    2. Choose the right financial institution

    South Africa has a strong financial sector with many banks and other financial services for businesses. Here are some of the traditional banks you can choose from: 

    • Standard Bank offers an entry-level MyMoBiz Account with pay-as-you-transact pricing. They also have a Business Current Account with more features and additional support – but also higher account fees.
    • Nedbank offers a start-up bundle for sole proprietors and private companies with an annual turnover of less than R3 million. The account has a monthly fee.
    • Absa has current accounts for small businesses with an annual turnover of up to R20 million. Their entry-level offer is the Business Evolve Lite account, and comes without monthly fees.
    • FNB has accounts for small businesses at various stages. Their First Business Zero account is targeted towards sole proprietors with a turnover of R5 million, and has no monthly fees.

    While these banks offer entry-level business accounts at zero or low fees, it’s important to check fees for additional financial services like business credit cards and access to funding solutions. These often have high interest rates and inflexible repayment terms

    3. Compile the required documents

    What documents are required to open a business bank account? You should always check which documents are required from the bank of your choice. Below are some of the documents that are generally required by traditional banks: 

    • Business registration documents from the CIPC.
    • Proof of residence at a South African address.
    • Copies of the directors’ IDs.
    • Copies of passports for foreign directors.
    • A tax clearance certificate from SARS.
    • Proof of business funds.

    If you want additional functionality with your business account, like access to funding and credit cards, you often also need to have:

    • A business plan and financial projections.
    • Proof of regulatory and statutory compliance for your industry.
    • A record of your business’s financial history. 

    4. Submit your application

    Once you have all the required documentation and are sure you meet the requirements set by your bank, you can submit your application at your local branch.

    Some banks have online application forms. Make sure to keep records of your documents in a digital format.

    The application process can take anywhere from a few days up to a week, depending on how well your bank streamlines its banking processes.

    5. Activate your account

    Once your application gets approved, you can activate your business account by making an initial deposit. Once you’ve followed these steps, you’re ready to do business. 

    How can I open a business bank account?

    How Do I Qualify for a Business Bank Account?

    Are you applying for a business account at a traditional bank and have all the documentation listed above?  

    Apart from the required documentation, you often need to meet additional criteria to open a business account in South Africa. Depending on your bank and the account you’ve opted for, you may have to meet stringent criteria like: 

    • An annual turnover threshold.
    • Minimum balance requirements.
    • Cash flow projections.

    Having a dedicated business bank account is well worth it. It gives you more financial control and legitimises your business in the eyes of new clients. 

    “Having a dedicated business bank account is an effective way to legitimise your business, leverage business-specific tools to operate more effectively, and it may ease the funding application process.” – Trevor Gosling, co-founder and CEO at Lula 

    How can I open a business bank account?

    Are There Alternative Business Accounts Available for Small Businesses?

    Applying for a business account at a traditional bank is one way to meet your business needs.  But is it the best way to get full, digital banking functionality and fast access to funding? 

    Trevor Gosling, co-founder and CEO of Lula notes how “banks provide an impersonal service because they’re not so interested in the smaller, not-so-profitable accounts.” He further comments that “traditional banks build their business models around and channel their resources towards larger corporate accounts.

    So how can you open a business bank account that serves your small business’s needs?

    Banking platforms like the one offered by Lula use innovative fintech solutions for a more powerful and affordable banking experience, and in the case of Lula, with faster access to flexible funding. 

    Lula’s Unlimited and Free Business Bank Accounts come with a host of features that can enhance the way you manage your cash flow.

    How can I open a business bank account?

    With Lula’s Unlimited Business Bank
    Account, get: 

    • 1.5% annual interest on your balance.
    • Even easier access to funding within as little as 24 hours.
    • Access to a powerful cash flow manager, Lulaflow.
    • Dedicated support from real humans in real time.
    • 5 Free Lula business bank cards.
    • Unlimited free EFTs.
    • Access to Lula’s Multicompany feature to manage multiple business accounts. 
    • Instant access to virtual cards on your mobile phone.

    With Lula’s Free Business Bank Account, you get access to:

    • The Lulaflow cash flow management tool for real-time insights and support to help with financial planning.
    • Real, tailored help from humans – not an AI chatbot.
    • Even easier access to funding within as little as 24 hours.
    • 1.5% annual interest on your balance.
    • One free business bank card with unlimited free swipes.
    • Instant access to virtual cards on your mobile phone.
    • Access to Lula’s Multicompany feature to manage multiple business accounts.

    Opening a Lula Free Business Account is free, of course, and has zero monthly fees. 

    Looking for something a bit more advanced to handle your growing business’s banking needs? Upgrade to the Unlimited Business Account. At R500 per month, it comes with all of the above features, plus:

    • Unlimited free electronic funds transfers (EFTs).
    • Priority support from our Customer Success team.
    • Five free business bank cards. 

    Note that although having a Lula Business Bank Account makes it easier to apply for funding with Lula, it’s not a prerequisite for funding applications. 

     

    How can I open a business bank account?

    What Are the Costs of Opening a Business
    Bank Account?

    The costs of opening a business bank account in South Africa depend on the bank and type of account you choose. 

    Some traditional banks offer entry-level business accounts that are more affordable than their regular or premium banking solutions. 

    These entry-level accounts for small businesses have low or even zero opening and monthly fees, but often have limited functionality. Transaction fees, minimum balance requirements, and charges for additional services can add up quickly as your business grows.

    Lula’s Free Business Bank Account has zero opening costs, no monthly fees, and one free business bank card. So, what do you pay for?

    • Electronic Fund Transfers (EFTs). 
    • Foreign currency exchange fees when transacting abroad. 

    Can Non-residents
    Open a Business Account
    in South Africa?

    Yes, both residents and non-residents can open business bank accounts in South Africa. With Lula you can open a Business Bank Account as a non-resident. All you need is a valid permit or visa and proof of a local address to verify the account. The key is where your business is registered – if it’s a South African registered company, it should be fairly straightforward to open an account. 

    What Type of Funding
    Can I Access with Lula’s
    Business Bank Account?

    Lula’s Business Bank Accounts give you easier access to additional financial services like business funding. We recommend opening an account with a bank that can meet your business needs and gives you easy access to funding.

     

    How Can I Open a Business Bank Account Online?

    Opening a business account with Lula is easy, 100% online and takes less than 10 minutes. Here’s how it works:

    Get started
    • Fill in your personal details.

    • Upload a proof of residence.

    • For an Unlimited Business Account, submit your CIPC proof of business registration.

    • Verify your ID with a selfie and a picture of your ID*.

    Trusted by business owners like you.



    Theresa Ward and Edwina Butterworth
    What we liked about Lula is that the process for application was extremely easy. Within a couple of hours, we were approved.
    Allistair Bunding
    The great thing is that the whole transaction was done in 5 minutes. Lula understands my business.
    Ghia Nadel
    Lula has enabled me to expand my product offering, buy equipment and, as a result, create jobs in my community.
    Phaedon Gourtsoyannis
    Having easy access to cash is probably one of the most important things, that’s where Lula comes in.
    Willem Haarhof
    The biggest challenge we face is access to cash. What Lula has enabled me to do is take that worry about cash flow away.

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