Credit Union/Co-op Banking

[Erick Wujcik]

Since there was a thread about starting a business, I thought I'd offer some advice on banking. I'll start with a post from a previous thread, "Starting a "Legal Company", need help, STAT!":

Michigan, all you really need is to stop down by the county court house and file a DBA (Doing Business As). Costs us about $12 to do a registry search to ensure we're the only ones (locally) with the desired name.

Correct.

Once you've got the DBA paperwork, you can open a bank account in the name of the company. This allows you to accept checks in the name listed on your DBA.

I just want to add an important note on alternatives to conventional banks.

Before 1990, I always used a bank (or a savings & loan, which is only slightly different) so that I could cash checks. It was always an expensive proposition.

However, when I started up Phage Press, I found out I could open a business/commercial account with a credit union (again, this is Michigan; in other states your millage may vary...).

Even since then I've been doing business with a small, church/community based, credit union. They have only two real full-time offices, plus a few part-time office windows (two are located in Catholic High Schools, so the students can learn about banking).

The advantages to me?

1. Cost. I pay $2.00 per month. That's it. No charge for cashing checks!

2. Speed. Since it's a small operation everyone knows me. In other words, it's been years since a check was "held," no matter where it comes from, or how large the amount.

Otherwise, my credit union works nearly as well as a bank. It has international ATM affiliates (I could get my cash even in China!), and a great on-line banking center that allows for most functions.

About the only thing I couldn't do with the credit union is arrange for a "Merchant Credit Card Account" (that's the kind that allows you to take credit cards for your purchases). Not a huge deal, since there are hundreds of on-line outfits that do that these days.

When things like paypal.com, cafepress.com, and other online services offer so many alternatives, the need for a business checking account is greatly reduced. Still, a business checking account is a good backbone for any business.

Erick