As healthcare technology (healthtech) and biotechnology (biotech) companies expand globally, managing finances becomes more complex. This guide provides insights into the critical considerations and steps required to open a business bank account tailored to the unique needs of healthtech and biotech companies.
Why Healthcare Tech and Biotech Companies Need a Dedicated Business Bank Account
Given the specialized nature of healthcare and biotech industries, a business bank account is not just a formality—it is a strategic tool. Here’s why having a dedicated business bank account is essential:
1. Compliance
Healthcare and biotech companies must adhere to strict regulatory requirements, including reporting standards for grants, investments, and tax compliance. A business bank account ensures clear financial records, making audits and compliance easier to manage.
2. Access to Investment and Funding
Healthtech and biotech businesses often rely on venture capital, government grants, and institutional investors. Investors expect transparent financial management, which is easier to demonstrate with a dedicated business bank account. Moreover, a bank account based in a trustworthy jurisdiction can add trust to the potential investors too. Consider EU, UK, Singapore or North America for account opening.
3. Managing Global Payments
In these industries, cross-border transactions are common—whether paying international research partners, suppliers, or clinical trial sites. A global business bank account enables efficient handling of multi-currency transactions and can help reducing fees.
Types of Bank Accounts for Healthtech and Biotech Companies
Selecting the right type of business bank account is crucial to meet the operational and financial needs of a healthcare or biotech business.
1. Business Account
A business account provides the flexibility needed for daily transactions, such as payroll, vendor payments, and subscription fees for software tools. Many banks offer online portals to help track these transactions easily.
2. Multi-Currency Accounts
These accounts allow companies to hold, send, and receive payments in multiple currencies. Multi-currency accounts are essential for companies collaborating internationally, as they help reduce foreign exchange costs.
3. SPV or Project Based Accounts
SPV or project based accounts are ideal for specialised R&D projects or joint ventures where several companies or investors are pooling funds. Some banks offer such project based or SPV accounts that help to separate funds and track financial records.
4. Merchant Accounts for Payment Processing
Healthtech businesses that sell directly to customers, such as those offering SaaS platforms or digital health tools, need merchant accounts to process card payments. These accounts integrate with payment gateways for seamless transactions.
If you are looking for a banking partner that can open one of the above mentioned accounts for your company, fill out our contact form with your details and we will happily share a list of banks that are friendly to the healtech and biotech industry.
Key Features to Look For in a Business Bank Account
Not all bank accounts are created equal. Healthtech and biotech companies should evaluate banking options based on these essential features:
1. International Payment Capabilities
Given the global nature of these industries, companies need accounts that support low-cost international wire transfers and multi-currency payments. Banks with global networks can offer favorable exchange rates and reduced fees.
2. Integration with Financial Software
Healthtech and biotech companies often use software like QuickBooks, NetSuite or Xero for accounting. Look for banks that integrate with these platforms to streamline reporting and cash flow management.
3. Digital and Mobile Banking
With global teams and decentralized operations, the ability to access banking services online or through a mobile app is crucial. Look for features like remote check deposits, payment scheduling, and real-time transaction alerts.
4. Account Management and Dedicated Support
Some banks offer relationship managers or dedicated support teams for business clients. These services can be invaluable for biotech companies navigating complex financial transactions or applying for loans.
Steps to Open a Bank Account for Healthtech or Biotech Companies
Opening a business bank account involves several steps:
Step 1: Select the Right Banking Partner
Compare banks based on their features, global presence, and experience with healthcare or biotech businesses. Some banks specialize in serving industries with complex regulatory requirements. Once again, if you would like to get a lsit of digital banks that we know are supporting the industry, just fill out our contact form and we will revert via email.
Step 2: Gather Required Documentation
You will typically need the following documents to open a business bank account:
- Business registration certificate or incorporation documents
- Tax identification number (EIN or equivalent)
- Personal identification for the business owner(s) or authorized signatories
- Company address and contact information
- Business plan or projected payment and currency exchange flows
Step 3: Complete the Application
Depending on the bank, you may be able to apply online or need to visit a branch. Digital banks may offer everything online and process the applications faster.
Step 4: Make an Initial Deposit
Some banks require a minimum deposit to open the account. Be sure to understand the bank’s balance requirements and fee structures before making the deposit.
Step 5: Link Your Account to Business Tools and Platforms
Once the account is active, connect it to accounting software, payroll systems, and payment gateways to ensure smooth financial operations.
Common Pitfalls to Avoid When Opening a Business Bank Account
Avoid these common mistakes to optimize your banking experience:
1. Mixing Personal and Business Finances
Using personal accounts for business transactions can lead to accounting errors and complicate audits. Open a dedicated business account from the start.
2. Overlooking Foreign Exchange Fees
For businesses with international operations, hidden foreign exchange fees can eat into profits. Choose banks with transparent fees and favorable exchange rates.
3. Ignoring the Bank’s Customer Support
In industries where transactions are often complex, having access to responsive customer support is essential. Ensure your bank provides adequate support for business clients.
4. Not Planning for Future Growth
Choose a bank that offers scalable services, such as business credit lines or financing options, to support your company as it grows.
5. Revisiting Your Fee Structre Once Business Grows
Choose a bank that is flexible and is ready to revisit the fees structure after your buiness demonstrates growth in payment and currency exchange volumes. Such a simple agreement might save you ton of money heading into the future.
Conclusion
Opening a business bank account is a vital step for healthcare tech and biotech companies. With the right bank account, you can manage global payments, open several accounts for specialized projects, manage the financial risks and set a good base for future growth.