A New Practitioner's Guide to Stepping Into a Bank

Walking into a bank right after graduation can be a painful mix of intimidation and confusion. To make matters worse, many people working at the bank don’t fully understand the questions they’re asking (no shade – many are simply not familiar with the unique needs of entrepreneurs, let alone healthpreneurs), which can leave you feeling even more confused!

This is why we’ve put together a summary of how to navigate opening up a business bank account. We’ll lead you through how to decide on the right option, how to answer questions you might be asked, and what information and/or documents you need to come prepared with. 

Before we get into the nitty gritty, we must introduce the most important thing you’ll need to arm yourself with before entering a bank – confidence. You should never be anything but confident in your decisions, banking included. If you don’t understand something, try gathering as much information as possible and then run it past an expert, like us! After you’ve thought things through you’ll be able to confidently return to the bank to make your decision.

Before you walk in you’ll need to determine if you’re operating your practice as a sole proprietor or through a corporation. 

New grads tend to get confused with these terms but it’s very simple: 

• You’re automatically a sole proprietor when you start practising. It doesn't matter if you're registered for GST/HST or any other government programs.

• If you’ve incorporated, you’ve gone through a paperwork heavy exercise to create a separate legal entity for your practice. You should already be working with an accountant by the time you step into a bank, so we won’t get into the banking options for corporations here. Pro tip: If the banking associate is asking you for things like “articles of incorporation,” they’re referring to a corporation. If you’re not incorporated, you can let them know that you’re a sole proprietor. 

Okay, so you’re a sole proprietor – now what?

Before you open a business bank account, you should know that’s there’s no actual requirement for you to have one.

The CRA (Canada Revenue Agency), your patients and your professional college don’t require it. People often think it will make them look better or more professional, which generally doesn't apply for our industry. 

The main benefit is to keep your record keeping organized.

If you have a separate business account, all your revenue and expenses would come in and out of one place. However, as long as you’re properly tracking this yourself, (which you should be doing anyway – business bank account or not), it’s not necessary. If you want to read more about the pros and cons of whether you need one or not, check out this article.  

If you decide you want to open one, make sure you’ve checked out the options available.

You don’t have to open a business bank account at the same location you use for personal banking. Shop around - and be sure to use our helpful resource, found below!

When determining which account is right for you, it’s important to think about how you’ll use the account. Ask yourself questions like:

• “How organized am I and what is my plan for recordkeeping?”

• “How many transactions will I have each month? Will they be electronic (like POS and eTransfers) or paper (like cheques)?”

• “Will my clinic be processing patient payments or will I be doing this myself?”

• “How will I be paying for my expenses?”

To help you decide on which bank and account option is best for you, we’ve got an in-depth comparison of the top bank accounts for small businesses. Download it below! 

Once you decide on an account option and a bank, get in there to open up the account! 

Come prepared, as they’ll likely ask you for some of the following: 

• Identification – This one is pretty easy. Make sure it’s government issued and up to date, and you’ve brought a couple options.

• Master Business Licence (MBL) – This request seems to confuse new grads the most. In Ontario (and other provinces have similar laws) there’s there’s two main reasons you’d need a MBL:

  • To open up a business bank account, as some banks ask for it.

  • To practise under a name other than your own. For example, if you start practising as “Dr Jane Smith ND” you wouldn’t need to apply for a MBL. However, if you were to start practising as “White Lotus Naturopath” you would need a MBL, since you’re practising under a name other than your own. If you’re interested, we go into more detail on the MBL here.

• Business registration – If you’ve registered your business with the CRA and obtained a 9-digit business number (for things like payroll, GST/HST), they may ask for this too. Make sure you have the number ready.

• Money – You’ll need to transfer a small amount of money into your new account. For most accounts, this can be as little as $20, so make sure you have the cash ready to deposit. 

That’s it! Pretty easy right? If you came across new questions you didn’t understand while at the bank, don’t hesitate to take a step back, discuss with an expert like us, and then return to finalize things. Rome wasn’t built in a day and your practice doesn’t need to be either. Once your account is open, you can start using it!