Best Second Chance Business Checking Accounts of 2022

Katie Stiner

A negative banking history such as bounced checks and forced closures of accounts will result in a bad ChexSystems report, creating difficulties opening a business checking account. With second chance business checking accounts, there are fewer requirements and many allow you to apply for an account online. We reviewed the top options based on their features, fees, and overall quality.

Seamless integration with a wide range of business tools

$0

Monthly Fee

0%

Est. APY

Overview

Novo allows easy integration with third-party accounting software, including Quickbooks and Xero. You can also link your Novo debit card to your Google Pay or Apple Pay Wallet. Novo also syncs with your Stripe processing account and easily integrates with Slack to get automated updates on your bank account.

If you are looking for a business checking account that is easy to use and with almost no fees, you might want to consider Novo. The bank account is also accessible in the app store for both iOS and Android devices.

What we like

  • Free ACH transfers, mailed checks, and incoming wires
  • Minimal fees and ATM reimbursements
  • Backed by FDIC insured
  • Integration with other apps
  • Doesn’t check your credit score

What we don't

  • No APY earned on your balance
  • No cash deposit
  • No outgoing wires or checkbooks

Free unlimited transactions and invoicing software

$10

Monthly Fee

0%

Est. APY

Overview

NorthOne helps you manage your finances with its invoicing app, budgeting tool by creating an unlimited number of sub-accounts with the envelope functionality, and integrating with a suite of business tools and software.

What we like

  • Budgeting tool to help manage your finances
  • Smart integrations with business tools
  • Send invoices from the app
  • Low minimum deposit
  • No hidden fees
  • Unlimited transactions with no fee

What we don't

  • $10 monthly fee
  • No in persona customer support

Built for solopreneurs to optimize taxes and finances

$0 - $4.99

Monthly Fee

0% - 1.00%

Est. APY

Overview

Lili’s business checking account was built for freelancers, sole proprietors, and single member LLC with or without a DBA. The account comes with features that help users keep their banking costs low, optimize their taxes, and manage their business’s finances.

What we like

  • FDIC insured, up to $250,000
  • Optimize taxes to pay less
  • Invoicing software included
  • No maintenance fees
  • Automatic transfers to emergency account

What we don't

  • Only for solopreneurs
  • No wire transfers
  • Interest on lili pro only

Business banking that streamlines bookkeeping

$0

Monthly Fee

0%

Est. APY

Overview

Relay offers a simple two-tier pricing plan. You can get started with no monthly fees and no account minimums. When you upgrade to the Pro plan, you’ll benefit from additional features such as free domestic and international wire transfers, or the ability to auto-import bills from QuickBooks and Xero.

What we like

  • Streamlines bookkeeping
  • No monthly fees
  • No minimum balance requirement
  • Seamless software connections
  • Set spending limits for employees

What we don't

  • No sign-up bonus or rewards
  • No physical branches
  • No interest earned on balances

What is a second chance business checking account?

The majority of financial institutions use the ChexSystems report to understand your banking history and determine how you’re likely to manage your money. A negative report could hurt your chances of opening a business bank account. 

A second chance business checking account provides an alternative route for small businesses. This is where banks and financial institutions bypass the ChexSystems report and use more flexible criteria to open your business bank account. 

The number of financial institutions that offer this account is limited, but there are several options available online. 

Using a second chance business checking account can help you rebuild your ChexSystems score and later apply for a traditional business account elsewhere. 

Who needs a second chance business checking account?

Business owners with a low ChexSystems score will benefit from a second chance business checking account. These accounts will offer various features such as debit cards and direct deposits, although accounts can have restrictions. 

What are the pros and cons of a second chance business checking account?

There are many pros and cons of opening a second chance business checking account. Here are a few for you to consider before applying:

Pros

  • Less strict criteria: There are fewer requirements for approval and the criteria are less strict in most cases. 
  • Separate finances: As a business owner it’s important to separate business finances and personal finances. If you are unable to qualify for a traditional business checking account, a second chance account can help you better manage your finances. 
  • Rebuild banking history: Responsible management of your finances can help you rebuild your banking history, where banks may consider you for financial products in the future. 

Cons

  • Service fees: There may be higher than normal monthly maintenance fees.
  • Minimal balance: Many second chance business checking accounts require you to maintain a minimum balance on your account. 
  • Credit check: Some institutions may use a credit check as part of the account opening application instead of ChexSystems. If you have a bad credit history, this can hurt your chances of opening an account.
  • Limited overdraft protection: Overdraft protection allows a transaction to go through when you do not have sufficient funds to pay the transaction. Transactions will likely be declined with a second chance account.

What are the fees for a second chance business checking account?

Second chance business checking accounts have higher fees than a normal account to mitigate the risk of a customer’s poor banking history. Here are a few fees for you to consider when looking into an account for your business:

  • Monthly fees: While there are a few institutions that waive the monthly maintenance fees with balances over a certain amount, the majority will charge a fee in the region of $5 – $10 per month. 
  • Overdraft fees: Accounts that provide overdraft protection will charge you a fee for using overdraft facilities. 
  • Debit card replacement fees: If you lose your debit card, there may be a fee to replace the card.
  • Account setup fees: To open your account, there may be a one-time setup fee charged by the institution. 
  • Paper statement fees: To avoid paying fees for statements, many institutions allow you to sign up for electronic statements for free. 

Fees vary between financial institutions and can quickly add up. It’s a good idea to review the terms and conditions before you sign up for an account, so you are aware of all the possible fees that may be charged.

What are the alternatives to a second chance business checking account?

If you decide that a second chance business checking account is not for you or if you are denied an account, there are alternatives for you to consider.

Bank and credit union managers often have the authority to override negative ChexSystems reports. If you belong to a credit union, it’s worthwhile visiting your local branch to see if there is anything they can do. 

Alternatively, you can look into improving your ChexSystems report. First, you’ll need to request your report and identify any errors. If there are mistakes, file a dispute straight away. Any debts, unpaid fees, overdrawn accounts should be paid off. Once you have paid off all your debts, you can ask creditors to update their records. 

As your ChexSystems report improves, you can apply for a business checking account without worrying about your previous financial history blocking your application. 

How to choose a second chance business checking account

When looking for the best second chance business checking account, here are some key factors to consider before you submit an application:

  • Compare multiple providers: Fees and services will vary between financial institutions. Shop around and compare multiple providers to ensure you are getting the best services, reasonable limits, and the lowest fees available for your needs. 
  • Documentation: Depending on your business structure, you’ll need to provide documentation to support your application. Documentation can include articles of incorporation, partnership agreement, business license, personal identification, and registration of trade name. 
  • Build good financial habits: Improving your financial habits and management of money can give you better opportunities down the road to apply for a business checking account with better benefits. Avoid going over your limits, keep an eye on your transactions daily, and keep an emergency fund for your business in case of unexpected expenses.