Banks Now Asking For Forex Business Plan Before Opening Accounts

Hello my fellow traders.

Has any one of you faced this dilemma while establishing his/her Forex Corporation?

I was faced with an increase/tightness in banks criterion and was asked to provide a thorough FOREX Business Plan in order to open a bank account.

Not a trading plan but a Business plan.

Has any one of you ever done one for your business? If yes is it something one could perhaps take a look as a template and modify and see if this fly?

As new traders come in the market place it might be useful for all if we share it.

Thanks in advance.

If you are opening a trading business...it makes good sense to have a business plan. This will allow you to concentrate on the BUSINESS aspect of trading. More than just to have a trading plan, it is absolutely essential to see that you have an overall picture of what you expect to do.

It also allows the bank to relax a bit about whether you are going to be a "flash in the pan" or have a solid foundation of experience and are taking this seriously.

Trading is serious business and should be done seriously. If you are ready to go live, try going live with your own money first "as a hobby". See how it works out with a small deposit. If you can grow your small deposit into something greater than 25% annually, you should consider starting a business for tax reasons and pursue this as a business NOT a hobby. If you are still having trouble getting 25% annually keep studying and worry about incorportating when there is something more to protect.

To this end I have attached a sample (actually very old) business plan. It is very NON-sexy but has teeth. Also if you look up business plan on the web you will get thousands of examples.

good luck

The least you could do is say "Thank-You"

Thanks.
If you don't mind me asking...
Are you in the Tampa Bay area? I'm in Florida myself.

Hey I don't know if this was directed to me but I had sent a thank you that was under review by the administrator, now I don't see it posted sorry about that.

Thank you very much!

Don't know why they would ask for a business plan just to open an account. Usually they would ask for busimess plan of any small business before loaning or investing money in your business.

Might be, the banks are hurting right now (with all that FDIC insurance crap and such) and want to make sure there would be cash flow going thru the account or else they may have more expenses than it's worth.

Thanks for posting that gs! Looks like you have put thought into this.How long have you been operating under this plan?
Did you use that plan for a loan app at one time? I did not know a bank would consider loaning money to a trading firm for spec trading.

You are correct SeaTrade, banks will NOT loan to a business for speculation. And I have never asked for one. But banks also want to know if they're constantly going to have an issue servicing your account, because you don't know how to run a business.

If you are truly a business...then everything...EVERYTHING should be in the business name, including your expenses. Banks right now don't want to be fielding questions from the landlord, the power company, your credit card company, etc. over whether your going to be able to pay your bills. They want to know that you have an actual business plan that shows your doing something more than hiding your personal assets from the tax man.

BTW...any bank account will a regular bank is only a holding bucket, nothing more. The bank will not set up or allow you to trade directly from this account. You must deposit the funds for trading into a brokerage account, FROM this bank account. Likewise, the bank is going to want to see regular deposits from your brokerage account to at least look like your paying your expenses from your businss...so will the IRS for that matter.

Again, if you are trading a small $1,000-$10,000 account it just doesn't make any sense to be a business. The bank is going to see this too. Wait until you are grossing at least your current salary, if you have a job, or the equivalent...THEN worry about how to protect your earnings with a business or corporation.