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Checking Accounts
Keeping track of your freelance business finances can be challenging, so choosing the right bank account is important. There are many considerations, including account fees, minimum balance requirements, and additional features like payroll, invoicing and integrations with popular financial tools. Some banks also offer perks and additional services that can benefit freelancers, such as business loans, business credit cards or other deals. These can be useful if you incorporate your business or start an LLC. A checking account can be an excellent option for freelancers since it will allow you to deposit money and receive payments from your clients professionally. It can also help you efficiently manage your cash flow and prepare for potential audits.
Savings Accounts
If you’re a freelancer, keeping your personal and business finances separate is important. This is especially true if you’re invoicing clients, as it will be more professional to accept payments from them under the company name instead of your name. Freelancers often run into cash flow issues, so it’s crucial to have a bank account for freelancers that’s easy to access. It’s also vital to find a bank with low or no fees.
A savings account is a great way to save money for unexpected expenses and taxes or to build up your freelancer business’s assets. These accounts offer high-interest rates on deposits and a variety of other benefits, such as tax tools and automated savings capabilities. Most freelancer-friendly banks are online only, meaning you can bank from the comfort of your home or office. They also tend to offer a range of financial management tools for freelancers, including cash flow insight, spend analysis, and payroll.
Business Credit Cards
Business credit cards are a great way for freelancers to manage their spending, earn rewards and avoid late fees. They can also help you track your expenses and save on yearly taxes. Some of these cards offer bonus rewards on top spending categories, while others give you a reward rate on all purchases. Knowing your typical business expenses will help you find a card that best fits your needs and maximizes your rewards. Another advantage to a business credit card is that it can be helpful when you need extra cash in the short term or need to make a large purchase for your business. Depending on the issuer, these cards can offer larger credit lines than personal credit cards. However, independent business owners should know they are liable for all debts incurred with their business credit cards. Because of this, it’s not a good idea to use a business credit card for personal expenses.
Business Loans
Getting business loans as a freelancer can be difficult because many banks view freelancers as high-risk. A freelancer is already considered a sole proprietor, meaning they are responsible for all losses and debts their business may incur. Luckily, some alternative lenders can help you get funding for your freelance business. These lenders often have less stringent lending requirements than bank and SBA loans.
Some of these alternative lenders include online business lenders and microlenders. Depending on your needs, both lenders offer various loan products and rates for different businesses.
