Why Your Business Needs A Current Account

A current account is normally opened by business entities to carry out their banking transactions especially if the business has a frequent number of transactions.

Most business owners in Kenya, and especially in the SME sector, use their bank account for business transactions and feel that opening a current account is cumbersome and elaborate.

Therefore, the natural tendency for most people would be to deposit any amount earned from business transactions into their personal accounts. This practice is not only financially unsound but can also deprive your business of benefits associated with a current account.

With an Equity Bank business current account, you are free to make deposits, receive money, make payments, make withdrawals, borrow, get a checkbook, and set up standing orders.

In general, once you open a current account for your business, you stand to reap several benefits:

Segregate business finance from personal finance

While you may be the owner of your business, small or big, it is always financially sound to have two separate accounts for your business and your savings.

Opening a separate current account in which business income and expenses are recorded helps in bringing about a distinction of what pertains to the business and what pertains to the personal finance of the proprietor.

This not only helps in better financial planning on the personal front but also helps in giving an exact picture of the business at any point in time. In some cases, when all the transactions are carried out in a single personal account, the business owner may not be able to recognize that his business is running at a loss if his finances are healthy.

Segregation of business finance from personal finance is critical, and this is enabled by having a current account.

Ability to prove creditworthiness

Sometimes, your creditors and other lenders would want to check your business’ creditworthiness before advancing credit to you.

Operating a current account can help in facilitating this process. You could give them a letter issued by your bank stating that you hold a current account.

Overdraft facility

Another important benefit of having a current account is that the bank can easily avail overdraft facilities when needed.

This means the account holder can overdraw the balance in his or her account temporarily, to plug the shortfall in working capital. This is a short term borrowing given to business account holders.  A normal savings bank account does not have the facility of overdraft. A current account can, therefore, help in meeting your short term financing needs -.

Professionalism in business

While dealing with business acquaintances, it is very important to maintain professionalism. This helps in enhancing your image and also in the growth of the business.

A current account in the name of your business is an important factor in achieving this. This is because the cheques you issue and receive will carry the name of your registered business. Having a current account signifies your seriousness in carrying out the business.

Equity Bank’s current account has some great features tailored specially for SMEs and other businesses:

1. Once you open a current account with Equity Bank, you get a Cheque book.
2. The Equity Bank current account allows a minimum opening balance of Kes 5,000
3. You are entitled to free monthly statements and internal standing orders
4. This account can be operated in KES, USD, EURO, GBP, and other international currencies.
5. Mastercard & VISA debit and credit cards, as well as AMEX credit cards, are available where the account mandate allows.
6. Equity Bank allows the introduction of Known Agents by the account holders. The Agents can only carry transactions authorized by the account holders.

5 Reasons Why You Should Open an Equity Bank Current Account

1. This account does not charge any ledger fees or monthly charges.
2. You will not be charged for any cash deposits or Cheque handling.
3. No limit has been placed on the frequency and amount of withdrawals.
4. You require no minimum operating balance for your account to run.
5. Overdraft facilities are made available to you if you’re a holder of a Current Account.
6. You can do your banking in any of the country and regional branches.

What You Require to Open This Account

1. You will need an introduction.
2. You will also need the original IDs or passports of all partners listed in the Business Registration Certificate in case of a partnership, who will also be required to sign a mandate to open an account.
3. Original KRA Pin and VAT certificates and their copies are also a requirement.

Sign up Process

1. Download the application form
2. Present the filled out form and necessary documents to the nearest Equity branch.
3. The bank will then process your application and you can start banking with us.