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. 

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.

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. 

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.