How to open a business current account?

Opening a business bank account is essential to keep your business and personal finances separate. A business current account is just a like a regular personal current account, and you use it to keep any income that you have generated through work, make payments and more. A business account can make allocating your expenses and filing your accounts more straightforward with the HMRC and avoid confusion in the long run.

To open an account, you can use the comparison table provided by Everything Financial to check rates and other benefits such as free banking.

Whilst the days are gone where you needed a meeting with a bank manager before you are approved, you will still need to pass the most basic checks such as proving your address and that you are who you say you are.

Many banks will allow you to open an account completely online, others may require a telephone conversation with a company representative to discuss how your business makes money. Once approved, you will be able to start using your business bank account immediately. If you wish to use an alternative bank, Everything Financial works with a number of app-based online banking companies which allow you to apply and receive a business bank account completely online – since they do not have any physical bank branches that you can visit. Many of these new app based banks offer great tools to help you manage your business effectively, such as invoicing and credit control or tax return calculators.

What are the fees when you open a business current account?

There is usually a monthly fee for having a business bank account of around £5 to £6 per month. This might be free for a certain period of time as part of an introductory offer – and this would be a good thing to compare when you are shopping around for the best deal. Some banks that we work with offer no monthly fees provided that you pay a minimum amount into the account each month e.g £750 Other fees will apply for using your overdraft facility or borrowing money through your business current account.

What information do I need to provide by opening a business bank account?

You will be required to provide the following information when applying for a business current account:

  • Proof of ID (passport or photo driving license) for all named company directors
  • Proof of address (utility bill, council tax statement, recent bank statement).
  • Full business address (including postcode)
  • Your contact details
  • Companies House registration number (for limited companies and partnerships)
  • Estimated annual turnover

You should tell the bank if you have any foreign shareholders or directors of your business and that you need a UK business bank account, instead of having an international business bank account that is held overseas or offshore.

Is there a credit check when you sign up for a business bank account?

No, there are no credit checks involved when signing up for a business bank account. This is because you are not borrowing money (like a loan or finance), but using this as a bank account that you can put money into and make withdrawals and payments from.

What other benefits are included when I sign up?

Introductory offers – Compare business accounts for introductory offers including no monthly fees for the first few months, low fees for making cash withdrawals from ATM machines and free bank transfers for a certain period.

Personal advisor – Using a bank will give you access to a personal bank manager who you can visit one-on-one and get advice about making more complicated payments, using other financial products or borrowing business finance.

Telephone banking – Bank accounts come with telephone banking which you can call if you have any payments to query, need help getting started or require assistance making a large payment.

Online banking – Banks today have their own online banking portal and app that you can download. This allows you to check your balance and make any payments quickly and upon request.

Overdraft facility – A business bank account comes with an overdraft facility which you can use if you need some extra cash, maybe due to a busy period or an emergency. The rates for this could be high, so be sure to check the fees charged before using your overdraft.

Access to finance – You can usually access business finance quicker if you apply directly through the bank that you have a current account with – and you can get access to more favourable rates. Business loans can be very low cost when used effectively and you can repay early at any point.

Help sending payments – If you need help sending payments, whether in the UK or abroad, you can always get the assistance you need from your bank manager, the online banking app or through telephone banking – making life simpler for you and your business.

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