All business bank accounts are not created equal. It can be well worth spending some time early on to find the best business bank account for your business. Switching bank accounts during the later stages of your business can be a painfully tedious process. All high-street banks offer accounts specifically for businesses, and so do a number of lesser-known banks such as Aldermore and Handelsbanken. Many now also offer a choice of branch and online accounts.
Most banks try to attract new business customers with various perks, so feel free check out what’s on offer. An initial free-banking period – between 1 and 2 years – is offered by virtually all banks. Some may also try and lure you in with free software trials, online advice videos from established entrepreneurs, and even access to exclusive business lounges.
None of this really matters, however – what is most important is what fees the bank will charge you once the free banking period is over. Some levy a monthly account fee; others don’t. Some will charge you for paying cheques and cash in for every cheque you write, some won’t, and some will charge a flat fee for a certain number of cheques paid in.
Key Considerations
Determine how money will typically flow in and out of your business. Will payments be mostly made online by debit and credit card? Or will your customers mainly be paying in cash or by cheque, which will need to be physically taken into a bank?
Next up, decide whether you prefer doing your banking in person at a branch or online, or a combination of the two. Then, schedule an appointment with business account managers in at least three separate banks you’re considering. You’ll often come away with a pretty strong feeling about which one you prefer working with.
Finally, make sure you choose a bank which has a local branch near you. If you think your business is likely to relocate, choose a bank with lots of branches around the country. Ask how long it will take to open your bank account – some will do it in a few hours, while others can take up to ten days.
Opening an Account
To open a business account, you are required to provide details including:
- Proof of identity – your passport or driving licence
- Proof of personal address – current bank or building society statement, utility bill or council tax bill
- Your Company House registration details (if you’ve started a limited liability company) and incorporation certificate
- Business address and contact details
- Details of debit and credit cards currently held
You will also be asked to provide an estimated turnover for the business, details of any shareholders and the amount you are personally investing in the business.
Summary
Just like overseas, one can easily get distracted by shiny promotions when opening a business bank account in the UK. Being an impulse buyer doesn’t pay off, and having too many perks usually means sacrificing something else of value in return. Most UK banks offer a variety of account options for both startups and small businesses.
