If you run a small business, you’ll need a business bank account, but how do the different banks compare?

In this detailed guide, easily compare all the different providers, from traditional high street banks to digital platforms. Plus, find out what documents you need to open an account today.

You can jump straight to the relevant section for you or read on for a comprehensive guide to the best bank accounts in the UK right now.

On this page:

• The documentation you need to apply for a bank account
• Best UK bank account comparison
• Best digital banking platforms comparison

Guidelines on applying for a bank account

UK Finance has teamed up with UK banking providers to pull together some guidelines on what you need before you apply for a small business bank account.

These rules only apply to existing businesses that have a turnover of less than £6.5 million, have a clearly defined ownership structure and have all its owners operating in the UK.

In general, UK Finance recommends that you get the following bits of documentation ready in advance. Most business current account providers will be looking a few key pieces of information.

One document to prove your identity:

• Your full and valid UK or foreign passport
• Your national identity photocard
• Your full UK paper driving licence
• Your full UK or foreign photocard driving licence as issued by a member state of the EU or the EEA

One document to prove your address in the UK:

• Your full UK driving licence;
• Your full UK or foreign licence photocard driving licence as issued by a member state of the EU or EEU;
• UK or foreign bank or credit-card statement (must be less than three months old and not printed from the internet);
• UK mortgage statement (less than 12 months old and not printed from net);
• Council tax bill, payment book or exemption certificate (must be less than 12 months old);
• A letter or bill from a utility company (less than six months old, avoid mobile phone bill).

Business-wise, you’ll need:

• Your Companies House registration number (if you have one)
• Details about your business including turnover, tax information and other capital
• Details of all company directors or partners, including name, date of birth, address and National Insurance number

You can move through this guide on UK Finance to make sure you meet the requirements.

Once you’ve collected your documents, it’s time to choose an account. We’ve rounded up some of the favourites on the market.

Traditional banks

To give you an idea of what to expect, we’ve created a table of the best business bank accounts in the UK, detailing each provider’s key offerings for small businesses.

Best small business bank accounts 2023

Barclays

Barclays offers start-up and normal business accounts.

You’ll get free banking for 12 months with the Start-up Business Account. Plus, get free invoicing and account software from FreshBooks, worth more than £260 per year, and a UK-based team of business managers to help you grow your business.

Accounts for more established businesses are available to those with a turnover of up to £400,000 or between £400,000 and £6.5 million.

As for payment plans, both have a mixed payment plan that is great for businesses that use cash, cheques or mixed methods to make and receive payments – this plan has an £8 monthly fee. There’s also e-payment for those that receive electronic payments and make payments through online banking and debit cards, which costs £8.50 a month.

The Co-operative Bank

Business Directplus

The Co-operative Bank offers all the standard service you would expect from a high street bank, including branch and online support, a UK-based telephone support team, a relationship manager if eligible and a mobile app. But its big differentiator is its ethical business policy and carbon-neutral credentials.

Plus Business Directplus offers access to invoicing and payments app, Go Get Paid.

Best of all, new Business Directplus customers who keep their balance above £1,000 get 30 months of free banking with no monthly charge. If your balance falls below £1,000 at any point, you will be charged £7 a month.

Business Current Account

Business owners can benefit from no monthly account fee and support from business advisors with the Business Current Account. Its benefits also include free integration with accounting software and partnership service offerings, from insurance to HR tools.

FSB Account

The FSB account has absolutely no monthly service charge and is exclusively available to FSB members. It doesn’t have as many features as the others, but you can manage scheduled payments.

Compare The Co-operative Bank business banking on NerdWallet

HSBC

HSBC has two options for sole traders and single directors of limited companies. 

HSBC Kinetic

The HSBC Kinetic app is available to sole traders and single director-shareholders. There is no monthly account fee for the first 12 months.

This award-winning smartphone app-based business account is available for either Android or iPhone users.

Features

• Debit card
• Freeze or unfreeze your card in case you lose it
• Up to 30 per cent off TalkTalk Business broadband
• Make payments of up to £25,000 per day in-app
• Automatically categorised transactions to help monitor spending
• Set up and manage Direct Debits, standing orders and future payments
• Access via mobile or desktop
• Scan and deposit cheques safely in the app
• Credit card and savings account (subject to eligibility and application)
• Cashflow and spending insights that could help you manage your money better
• Apply for up to £30,000 overdraft in-app

HSBC Small Business Banking Account

A more traditional small business bank account from HSBC, aimed at sole traders and limited companies with turnover of under £6.5 million and looking to borrow up to £30,000.

Features

• Free banking for 12 months
• Visa debit card
• Loans from £1,000 to £25,000
• Overdraft
• Visa commercial card – no annual fee for the first year
• Access to secure digital banking including the ability to scan and deposit your cheques via the Business Banking Mobile app
• Banking 24/7 online
• Syncs with Sage accounting software
• UK-based telephone support
• International payments for over 60 currencies

At £8 a month once the initial 12-month free banking period expires, the HSBC Small Business Banking Account costs £1.50 more than its sister HSBC Kinetic account for smartphone users. Our view is that if you’re happy using an Android or iPhone, it makes sense to embrace mobile banking. 

Compare HSBC business banking on NerdWallet

Lloyds

Lloyds’ Start-Up and Small Business Account is aimed at small businesses with estimated turnover of up to £3m. Start-up or small business customers get 12 months of day-to-day banking for free whether you’re switching or opening a new account. It has free electronic payments and simple pricing structures. The monthly fee is £7 once the free banking period ends.

Lloyds also offers its Business Finance Assistant online accountancy package free for three months for new customers.

Compare Lloyds business banking on NerdWallet

Metro Bank

As well as bank accounts for larger businesses, Metro Bank has a specialist account for start-ups and SMEs which have a turnover of up to £2 million.

If your balance stays above £6,000 for the whole month, Metro Bank will waive your monthly account maintenance fee. Otherwise it’s £6 for that month. If you stay over £6,000 you get 30 fee-free UK transactions for a month with 30p per transaction in excess of that. Accounts that go below £6,000 will pay 30p per UK transaction.

In addition, customers can benefit from:

• Stores that are open seven days a week
• Business accounting tools
• UK-based contact centres

NatWest

Start-up Business Account

The Start-up Business Account is available for businesses that have been trading for less than a year and have a turnover of less than £1 million.

The account offers the usual smartphone app and online banking but what sets Start-up Business Account apart is the free business support NatWest offers fledgling businesses, either through its Business Builder digital tool or its NatWest Accelerator programmes targeting start-ups in today’s high-growth (digital), climate, fintech and purpose-led sectors.

Plus NatWest Start-up Business Account bundles free FreeAgent accountant software subscription for all business customers. 

No transaction fees for the first year and a half, with standard transaction fees after that. There is no monthly charge at all for a Start-up Business Account.

Like HSBC, NatWest has a mobile-first banking app, Mettle (see below). It has no monthly fees and no minimum transaction fee. It’ll be suitable for you if you’re a sole trader or a limited company with up to two owners.

Business Bank Account

NatWest Business Bank Account offers all the features of the Start-up Account plus a dedicated relationship manager to be your point of contact. It is targeted towards businesses that are turning over £1 million a year and those turning over less than that but have been in operation for over a year.

Again, there is no monthly fee but standard transaction charges do apply. 

As well as access to the Entrepreneur Accelerator programmes and complimentary FreeAgent accounting software, you can apply to join Bankline through the Business Bank Account, a one-stop-shop dashboard which gives you an overview of activity with sign-ons for multiple users, giving you a real-time overview of your bookkeeping – ideal for businesses with a higher volume of transactions.

Compare NatWest business banking on NerdWallet

RBS

Start-up Bank Account

RBS’s Start-up Bank Account mirrors its sister bank NatWest’s start-up bank account, except that it offers two years’ worth of free banking without transaction charges rather than 18 months.

In addition to the usual online and smartphone app banking, RBS Start-up Bank Account offers access to Tyl, NatWest’s own small business payments system, and can help your business develop a climate plan with lending, advice and resources.

Business Account

Aimed at businesses that have either been trading for under or over one year and have a £1 million annual turnover or those who have been trading for over a year with a turnover of less than £1 million. The RBS Business Account again mirrors sister bank NatWest’s Business Bank Account, offering 24/7 online, telephone and mobile app banking, no minimum monthly charge, plus a dedicated relationship manager.

Again, there is free accounting software from FreeAgent, access to the Enterprise Accelerator Programme, and multiple account management through Bankline.

Compare RBS business banking on NerdWallet

Santander

With Santander you’ve got a couple of options on the current account front.

Business Current Account

Please note that this account is only being offered to existing Santander customers at present – this is under ongoing review

This one’s open to you if you’ve been trading for less than 12 months and your business is opening its first business current account with Santander.

It comes with an arranged overdraft on an unsecured basis from £500 up to £25,000. To qualify you must have a good credit history and not have been declared bankrupt or have had an IVA within the past six years. On top of that, you must not have been a disqualified director of a failed business within the same time period.

After the first 18 months the account costs £7.50 a month with a cash deposit monthly limit of £1,000 and 70p per £100 deposited in excess of this monthly limit.

You can also nominate colleagues to have access to your account to help you manage the business finance.

There’s no minimum or maximum opening deposit or maximum balance to get started.

1|2|3 Business Current Account

Please note that this account is only being offered to existing Santander customers at present – this is under ongoing review

The main draw of the 1|2|3 Business Current Account is the cashback, which you can receive up to £300 in per year.

Other than that, it’s much the same as the Business Current Account.

Whether you’re on the start-up or the switcher offer, you’ll be paying £5 a month in fees. After your first 18 months (12 months for switchers) you’ll be put on the £12.50 account which also has a £1,000 monthly deposit limit and 70p per £1000 in excess of that limit.

Compare Santander business banking with NerdWallet

TSB

TSB’s Business Plus account has 30 months of free business banking for sole traders, partners and directors – as long as you stay within agreed limits and don’t go overdrawn. It doesn’t matter if you’re switching or are opening a brand-new bank account.

After that you’ll be paying £5 a month which will be waived if your average balance over that month is £10,000 or more.

If you prefer to bank in-branch, there are a network of TSB branches around the UK where you can do your banking.

TSB Business Plus also comes with business advice and support through Enterprise Nation for 12 months.

Virgin Money

M Account for Business

Designed for businesses with an annual turnover less than £1 million, the M Account for Business has no monthly fee as well as free day-to-day online banking.

M Account for Business customers get cashback for their business whenever they use their debit card, will earn 0.25 per cent cashback with no cap.

The M Account for Business comes with an optional 12-month overdraft called Planned Borrowing with a £1,000 borrowing limit. Planned Borrowing has an estimated annual interest rate (EAR) of 13.3 per cent.

The account also comes with the free M-Track dashboard for business insights and forecasting.

Business Current Account

The Virgin Money Business Current Account is designed for businesses with turnover of up to £6.5 million. It offers 25 months of free day-to-day banking, after which the monthly charge is £6.50.

In addition to all the standard online banking tools for monitoring your account, you can earn 0.35 per cent cashback on direct debit transactions (up to an annual cap of £500 per calendar year per debit card), discounts on business purchases, and more discounts when you use your debit card at selected merchants. The account can also be integrated with accounting software such as Sage, QuickBooks and Xero.

A cash limit of £700,000 per day applies.

Compare Virgin Money business banking on NerdWallet

Digital platforms

Of course, a small handful of digital banking platforms have appeared in recent years. Here’s a quick breakdown of their headline features.

Best digital banking platforms 2023

ANNA

ANNA is open to any UK resident who is a director of a limited company and non-limited businesses that are structured as a partnership or sole trader.

It takes three minutes to set up and you’ll get a personal webpage with a link to put on your online profiles or send it to someone directly. You can also give your employees their own debit card with a spending limit and it’ll sort out their expenses automatically.

You can set up free direct debits as well as scheduled and recurring payments.

Aimed at creatives, start-ups and freelancers, ANNA can generate invoice PDFs, and chase payment when overdue.

ANNA has two packages aimed at sole traders and small businesses: it’s pay-as-you-go tariff means you just pay per transaction such as 20p per transaction moving money in or out: otherwise, its Business package is £14.90 per month + VAT with the first month free. See full prices here.

Compare ANNA business banking with NerdWallet

CardOneMoney

CardOneMoney (formerly CardOneBanking) is aimed at sole traders, limited companies or partnerships who have a turnover of up to £2 million.

Add up to four additional prepaid corporate cards which will link to your business account. You can also export statements to a cloud accounting network.

Just be aware that this one isn’t covered by the Financial Services Compensation Scheme either.

It’s £12.50 a month with a £55 application fee.

Compare CardOneMoney with NerdWallet

Cashplus

Cashplus offers a good account if you already have a few members of staff on your payroll – you can add up to 20 additional business expense cards for your employees to use and download statements for each.

The card has two offerings:

Business Go: £0 a month with a £9.95 card issuing fee.
Business Extra: £9 a month, with 0.5 per cent cashback on your card spend and no card issuing fee.

Compare Cashplus business banking on NerdWallet

Countingup

Countingup is a relatively new player in the mobile banking market.

Its business offering comes with automated bookkeeping, business insights, professional invoices and automated receipt scanning as key features along with and tax calculated and filed for you. Add notes and attachments directly to your transactions or you can remind yourself to claim tax relief on the purchase.

This is a good choice if your business is UK-based as you can’t make or receive international payments with this account. Countingup hopes to include this feature in the future.

All accounting features appear in all of the accounts; these include receipt capture and tax estimate.

A three month free trial is offered, then its pricing structure is as follow:

• £3 a month if you deposit up to £750
• £9 a month if you deposit between £750 and £7,500
• £18 a month unlimited deposits

However, the self-employed can only keep up to £60,000 in their account, while limited company accounts are capped at £400,000. 

Compare Countingup with NerdWallet

Mettle

Mettle is part of NatWest but is an independent arm. This means that you can’t ring NatWest and expect them to assist with your Mettle account.

You’ll be eligible if you’re a sole trader or a limited company with up to two owners, though you must have a balance of less than £100,000 (or £50,000 for sole traders) to apply.

One of the main highlights is that you can create and send invoices directly from your smartphone, complete with company logo. Notifications will let you know when you’ve been paid. You can auto-match payments to invoices.

Again, it goes half-way there in terms of chasing overdue invoices. It’ll remind you that an invoice is overdue, but you’ll have to send the client a follow-up yourself.

Transactions-wise, you can manage recurring payments in-app, add receipts to transactions and export your expense data.

Other than that, you can sync your account with FreeAgent, Xero or QuickBooks but you can also export to CSV which is compatible with other accounting software.

A key consideration you must make is that the app isn’t covered by the Financial Services Compensation Scheme (FSCS). However, the account is covered under the FCA safeguarding requirements and the corresponding regulations. The purpose of safeguarding is to protect and return customer money if the company fails.

Mettle is free to use and free to join.

Compare Mettle business banking on NerdWallet

Monzo

Monzo is the latest of the digital banking platforms to introduce business banking. Open an account if you’re a sole trader or the director of a registered limited company by shares (Ltd). Multi-user access is available for limited companies. Just be aware that you need to have a personal account with Monzo before you can apply for a business account.

Accounts aren’t available to some types of businesses but this may be reviewed in future.

To limit financial crime, you can pay in £5-£300 of cash in one go, and up to £1,000 every six months.

As for features, Monzo integrates with Xero, FreeAgent and QuickBooks. With Monzo Business Pro, new Xero users can get six months of the cloud accounting platform free on the Business Pro account. It also has a Tax Pots feature, where you can set aside a percentage of your earnings to put towards tax every time you’re paid. What’s more, you can opt to be notified every time you get paid.

The pricing is on two tiers: Lite offers up the basics, but for additional features like integrated accounting and Tax Pots you’ll need to go Pro at £5 a month.

Revolut

Revolut is a good shout for business owners who travel and trade overseas. Customers can hold, exchange and transfer over 25 currencies with the real exchange rate.

You can issue physical and virtual cards and track your employees spending in real time.

Revolut comes with perks and benefits from partners such as Monday.com, Pact Coffee and Shopify.

In terms of accounts you’ve got:

• Free (£0 a month)
• Grow (from £19 a month)
• Scale (from £79 a month)
• Enterprise (bespoke – speak to Revolut)

Freelancers can choose from the free account (£0 a month), Professional (from £5 a month) and Ultimate (from £19 a month).

Compare Revolut business banking with NerdWallet

Starling Bank

The Starling Bank business account is open to you if you’re a sole trader or the owner of a limited company, a limited liability partnership or if you’re part of a limited company with multiple owners.

There’s no monthly charge on the account and it comes with an overdraft. If you’re running a limited company, you can apply for an overdraft up to £150,000. To boost your business’ functionality, you can add on a Business Toolkit for £7 a month. Extra tools include invoices and auto-matching, email integrations and VAT recorded on transactions. The other add-ons are a euro business account (£2 a month) and a US dollar account (£5 a month).

If you want to deposit cash, you can do so at Post Office branches across the country. It’ll set you back at least £3 per deposit and deposit limits vary.

What’s more, you can integrate your Starling Bank business account with Xero, FreeAgent and Quickbooks.

Tide

With Tide, you’ve got different account options.

The free Tide account gives you the ability to schedule payments along with access to Quickbooks, Xero, Sage and more. The Plus account (£9.99 a month plus VAT) includes one free expense card for your team with up to 20 free transfers per month. The Pro account (£18.99 a month plus VAT) includes two free expense cards for your team plus unlimited transfers. The Cashback account (£49.99 a month) has all of the features of the Free and Plus accounts along with 0.5 per cent cashback on your Tide card and a dedicated account manager.

Airwallex

Airwallex offers a business account with domestic and international business accounts, company cards and expense management – all in one place.

Its multi-currency account allows you to start collecting payments from your customers in their preferred currency so you can trade globally without the red tape.

The account is free and there are no set up costs, you just pay a small currency conversion fee.

Access a wealth of tools and integrations including Xero and QuickBooks, plus you can open an account in minutes online.

Wise for Business

Wise for Business (formerly TransferWise) allows you to pay international invoices, vendors and employees, at the real exchange rate, in over 70 countries. You’ll get a Wise business debit card too where you can earn 0.5 per cent cashback on all eligible business debit card transactions.

Give your accountants and team access to Wise and control their permissions, giving your employees an expense card too. Connect currency accounts to Xero and QuickBooks and pay up to 1,000 people with one click using batch payments.

It costs £45 to open an account and £3 for a Wise debit card. Other charges vary.

SumUp    

The payment processing firm, SumUp, has recently launched a business account offering. The account, geared at freelancers, sole traders and small businesses, is free but withdrawal fees apply after the third monthly withdrawal.

You can link your MasterCard with Apple Pay and Google Pay to make faster payments. With a SumUp card reader, you can also make a sale and access the money on the next day, even on bank holidays and weekends.

SumUp also has a built-in invoicing tool so you can send customised invoices from your phone or your computer. Share payment links with customers through text, WhatsApp, Facebook or another platform.

Looking for the latest deals? Compare UK business bank accounts with Nerdwallet here.

The post What are the best business bank accounts in the UK? appeared first on Small Business UK.

Setting up as one of the UK’s 3.1 million sole traders, you may have lots of questions around which business bank account is best for you.  

You will need to consider cost, free banking period (if there is one), overdrafts and integrations.  

We’ll be looking some of the best business bank accounts on the market targeted specifically at sole traders.

Compare business bank accounts now with this quick form.

Traditional banks

High street banks do offer sole trader accounts and they tend to have a free banking period, which is a huge bonus if your business is new and you’re trying to cut costs. Take a look at the summary below.

HSBC

HSBC has two options for sole traders and single directors of limited companies. 

Packages

HSBC Kinetic (Free for 12 months, £6.50 thereafter)

HSBC Kinetic is a mobile business banking app which is best for sole traders. You can apply in minutes through the app. Note that this will need a credit check.

This smartphone app-based business account is available for either Android or iPhone users.

• Make payments of up to £25,000 per day in-app
• Automatically categorised transactions to help monitor spending
• Credit card and savings account (subject to eligibility and application)
• Insights that could help you manage your money better

Small Business Banking Account (Free for first 12 months, £8 per month thereafter)

The HSBC Small Business Banking Account is a more traditional small business bank account from HSBC, aimed at sole traders and limited companies with turnover of up to £6.5m.

• Loans from £1,000 to £25,000
• Arranged overdraft
• Visa commercial card – no annual fee for the first year
• Access to secure digital banking including the ability to scan and deposit your cheques via the Business Banking Mobile app
• Syncs with Sage accounting software
• International payments for over 60 currencies

Compare HSBC business banking on NerdWallet

TSB

TSB’s Business Plus account has 30 months of free business banking for sole traders, partners and directors. It doesn’t matter if you’re switching or are opening a brand-new bank account.

Package

Business Plus Account (30 months free, £5 thereafter)

• Deposit cash and cheques in Post Office branches as well as TSB branches
• Add a business debit card to your account
• Business advice and support through Enterprise Nation for 12 months.

Co-op Bank

The Co-operative Bank offers the Business Current Account, which is ideal for sole traders who don’t often bank with cash or cheques.

Package

Business Current Account (No account fee)

• No additional cost to deposit cash at the Post Office
• Payment app, Go Get Paid, lets you automate your financial admin
• Integrate your accounting software like Xero, Sage or Quickbooks within your online banking    
• Free support tools such as webinars and start-up guides

Compare The Co-operative Bank business banking on NerdWallet

Barclays

Barclays start-up business account is the bank’s best offering for sole traders.

Package

Start-up Business Account (Free for 12 months, £8.50 a month thereafter)

• Free invoicing and account software from FreshBooks, worth £228 a year
• Expert advice from Barclays’ Business Direct team in the early months to help you grow
• Pay in cheques using the Barclays app

Metro Bank

Metro Bank has a simple Business Bank Account open to sole traders with under £2m turnover.

Package

Business Bank Account (£6 a month; free if your balance stays above £6,000)

• Local Business Manager as a key point of contact, but all colleagues can support you with day-to-day banking
• Store opening 7 days a week
• Transaction and service charges apply

Compare Metro business banking on NerdWallet

Virgin Money

The Virgin Money M Account is designed for businesses with less than £1m in turnover. There’s no monthly charge on the account. However, there will be a 95p charge for manual debit and credit payments – that is, transactions you have to do in-store.

Package

M Account (£0)

• Cash cheques digitally
• Use with Apple Pay and Google Pay
• Set up weekly balance and transaction alerts as you like

Compare Virgin business banking on NerdWallet

Digital banking platforms

Newer players to the game have their own products which are generally quicker and easier to set up and are operated online.

Tide

With Tide, you’ve got three different account options geared at sole traders and freelancers that can scale with your business.

Packages

Free (£0)

• Accounting integrations including QuickBooks, Xero, Quickbooks, Xero, Sage and more
• Multi-business – hold up to five accounts
• Create and send invoices for free

Plus (£9.99 per month plus VAT)

All of the features of Free, and:

• One free expense card for your team
• Priority in-app support

Pro (£18.99 per month plus VAT)

All of the features of Pro, and:

• Unlimited transfers in and out
• One extra expense card included

Cashback (£49.99 per month plus VAT)
All of the features of Plus, and:

• 0.5 per cent cashback on your Tide card
• Dedicated team of account managers

Compare Tide business banking on NerdWallet

Starling Bank

The Starling Bank business account is open to you if you’re a sole trader or the owner of a limited company, a limited liability partnership or if you’re part of a limited company with multiple owners.

There’s no monthly charge on the account and it comes with an overdraft. To boost your business’ functionality, you can opt for the Business Toolkit for £7 a month.

Packages

Original free account (£0)

• Connect to Quickbooks, Xero or FreeAgent
• 24/7 UK support
• Free UK transfers

Business Toolkit (£7 per month including VAT)

Everything in the Original free account, and:

• Invoices and auto-matching
• Tax estimation (for sole traders only)
• Making Tax Digital VAT submission

ANNA Money

ANNA Money is open to any UK resident who is a sole trader.

It takes three minutes to set up and you’ll get a personal webpage with a link to put on your online profiles or to send to someone directly. You can give your employees their own debit card with a spending limit and it’ll sort out their expenses automatically. It also has a receipt capture feature that ANNA automatically categorises and stores digitally.

You can set up free direct debits as well as scheduled and recurring payments.

There are two packages which are more suitable for sole traders, particularly those in the early stages. A Big Business package is also available at £49.90 a month + VAT with unlimited local transfers and ATM withdrawals. See full prices here.

Packages

Pay as you go (£0 per month)

• Free card in any country and currency
• 1 per cent currency conversion fee
• 20p per local transfer in and out of your account

Business (£14.90 per month plus VAT – first month free)

• Pay in cash with one per cent commission
• One additional debit cards included, then £3 per card per month

Compare ANNA Money business banking on NerdWallet

Coconut

Coconut is geared specifically at sole traders but is open to limited companies with too. It has the functionality to handle banking, bookkeeping, invoicing and tax. Sole traders can an extra help up with tax reports to help them with their self-assessment.

Package

Monthly plan (£9 including VAT)

• 30-day free trial
• Sole traders can add their personal account on to their business bank account to separate into personal and business finances
• Connect current accounts and credit cards from 25+ different banks including Barclays, Lloyds and Starling
• Notifications when payment has been made or received, automatic categorisation
• See calculations of how much tax you’ll owe and tips on what expenses you can claim

Revolut

Revolut is a good shout for business owners who travel and trade overseas. Customers can hold, exchange and transfer over 25 currencies with the real exchange rate.

You can issue physical and virtual cards and track your employees spending in real time. Integrations including Zapier and Slack and accounting software like Xero, Sage, FreeAgent, QuickBooks and FreshBooks.

Packages

In terms of accounts you’ve got:

Free (£0 a month)

• Five free local payments
• Free transfers to Revolut accounts
• Local accounts in GBP

Grow (£19 a month)

Everything in Free package, and:

• Five free international payments
• 100 free local payments

Scale (£79 a month)

Everything in Scale, and:

• 25 free international payments
• 1,000 free local payments

For freelancer accounts, there are three packages:

Free (£0 a month)

• Five fee-free local transfers
• No-fee transfers to Revolut accounts
• SWIFT account details

Professional (from £5 a month)

Everything in the Free package, and:

• Bulk payments
• 20 no-fee local transfers
• £5,000 currency exchange at the interbank rate

Ultimate (from £19 a month)

Everything in the Professional package, and:

• Five fee-free international transfers
• 100 no-fee local transfers
• One complimentary metal card

Compare Revolut business banking on NerdWallet

Monzo

Monzo has a couple of low-cost options depending on your business needs.

Accounts aren’t available to some types of businesses but this may be reviewed in future.

Packages

Lite (£0)

• Integration with Xero, FreeAgent and QuickBooks
• Instant notifications

Pro (£5 per month)

Everything in Lite, and:

• New Xero users can get six months of Xero free
• Tax Pots – set aside a percentage of your earnings to put towards tax every time you’re paid

Compare Monzo business banking on NerdWallet

Amaiz

With Amaiz, your account is protected by smart security features including biometric verification, transaction monitoring and fraud detection. Plus, you can make payouts in more than 70 currencies and customise your banking statements. Instant invoices and payments will make your finances easier to handle too.

Packages

Business (£0 a month – VAT may apply)

• Free onboarding

Business+ (£49 a month – VAT may apply)

• £100 onboarding fee

Enterprise (£99 a month – VAT may apply)

• £250-£1,000 onboarding fee

Mettle

Mettle is part of NatWest but is an independent arm. You’ll be eligible if you’re a sole trader, though you must have a balance of less than £50,000 to apply.

Mettle is free to use and free to join.

Package

Mettle (£0)

• Match payments to invoices
• Easily categorise your transactions
• Set aside a set percentage each month to put towards tax with Tax Pots
• FSCS protected
• Get FreeAgent free of charge, saving you £150 a year

Compare Mettle business banking on NerdWallet

Can I use a personal account as a sole trader?

In some cases you can, but it is helpful to have a business bank account for a number of reasons. It’ll be easier to split your business and personal expenses, for starters.

Business bank accounts have greater functionality such as cashing cheques into your account and it’s easier to manage expenses and do your tax return.

A business bank account will build a credit rating for your business so that you can access loans and other financing that you may need later down the line.

Bear in mind as well that some banks simply won’t let you have a personal account for your banking, even if you’re a sole trader. They might even close your account if they cotton on that you’re using your personal account for your business.

The best part? Business bank accounts often offer handy freebies like free accounting software or a free 12 months of banking, for example.

Looking for the latest deals? Compare UK business bank accounts with Nerdwallet here.

More on being a sole trader

Employing people as a sole trader

The post Best business bank accounts for sole traders appeared first on Small Business UK.

UPDATED July 2023: Most banks have resumed their business bank account operations. Santander is only allowing applications for new business bank accounts from existing customers, though this is under review.

To see the top offers right now, head to What are the best business bank accounts in the UK?

Original article, posted October 2020

Many banks have stopped accepting new applications for business bank accounts since the coronavirus pandemic surged in the UK.

This is predominantly down to increased demand for government-backed emergency loans like Bounce Back Loans and the Coronavirus Business Interruption Loans. Banks are focusing on providing these and tending to their existing customers’ most pressing needs.

Which banks are still offering business bank accounts?

SmallBusiness.co.uk has spoken to the following banks to find out where they stand on accepting business bank account applications.

HSBC

HSBC closed applications for new business bank accounts on September 30.

An HSBC UK spokesperson said: “Since the introduction of the Bounce Back Loan Scheme, we have given over £12bn of lending to the UK’s businesses, as part of an overall £20bn package supporting our business and personal customers. As one of the only banks that remained open to applications from all UK businesses since the scheme’s launch, we received a huge level of demand. With the scheme closing on 30 November, we need to focus our resources on fulfilling existing applications. We are no longer accepting new applications for Bounce Back Loans from companies that don’t have an existing HSBC business account and we will also stop taking on any new small business banking customers until 14th December. Applications submitted before 30th September 2020 will continue to be processed.”

Compare HSBC business banking on NerdWallet

Metro Bank

Metro Bank were opening business accounts for new to bank customers up until last Friday (October 9th). They’ve now put a temporary pause on opening these accounts.

A Metro Bank spokesperson said: “As a result of the significant surge in demand we’re seeing from businesses opening new accounts with us, we’re not able to accept further new business account applications in store or online at the moment.

“With the government lending schemes drawing to a close later this year, we need to ensure we can continue to support our existing customers, the pipeline of new account applications already in progress and associated Bounce Back Loan applications which we’re continuing to fulfil. We expect to reopen for new applications early in the New Year.”

Compare Metro Bank business banking on NerdWallet

Lloyds Banking Group (Lloyds Bank, Bank of Scotland)

A Lloyds spokesperson told us that they stopped accepting application at the start of the pandemic. This is so that they can see to existing customers with urgent needs. They said they would open business bank accounts again at the appropriate time.

RBS/NatWest

RBS and NatWest aren’t accepting new applications for business accounts at the moment.

A NatWest spokesperson commented: “We know this is a difficult and stressful time for our smallest business customers, and we’ve been working tirelessly to deliver the government schemes in a secure and robust way – successfully supporting 23 per cent of all lending across the three schemes. Due to the volume of these applications, we continue to prioritise our existing customers in regards to the government schemes.”

Santander

Santander’s website says: “We are not currently accepting new applications for Business Current Accounts, but we will review this position over the coming weeks and further details will be available on our website.”

TSB

TSB’s website says: “Sorry, we are only accepting Business Current Account applications from existing TSB Personal Current Account customers at this time. If you don’t already have an account with TSB we won’t be able to accept your application for a Business Current Account. This is to allow us to focus on supporting our existing customers through this unprecedented time. If you submitted an application before 28th September we will be in touch. We will update our website as soon as we are able to open accounts for new customers.”

Barclays

Barclays are accepting applications, but they too are experiencing increased demand.

A spokesperson for Barclays said: “We are accepting business current account customers but experiencing as delay due to high levels of demand.”

What about digital banking platforms?

Revolut, Tide, Monzo and Starling Bank have confirmed that they are still offering business accounts.

The use of digital banking platforms increased throughout the 2010s with more millennials seeking mobile-friendly banking apps. What’s more, according to a recent Direct Line survey, nearly half of young people want to become entrepreneurs. One in five have either started a new business since lockdown or plan to start one by the beginning of 2021.

With all of this in mind, it’ll be interesting to see whether this will be an opportunity for digital platforms to take a greater share of the market or if business customers across the board will remain loyal to the better-known high street banks.

If you want to see all your options easily in one place, you can easily compare business bank accounts with Nerdwallet now.

Read more

12 of the best digital banking platforms for small business – Considering a digital banking platform over one of the traditional stalwarts? We’ve picked out 12 of the best for your perusal

Best business bank accounts for sole traders – We’ve rounded up some of the best business bank accounts created with sole traders in mind

Opening a business bank account – how-to and best accounts – In this piece, we’ll look at how to go about opening a business account in the UK and what services are out there

The post Most banks not allowing small businesses to open bank accounts appeared first on Small Business UK.

While it may be tempting to start your new business venture without looking at the need for a business bank account dedicated to your enterprise, this might not be the best of ideas.

As your business grows and expands, it’s important to separate your business finances from your personal, day-to-day living.

New start-ups and part-time business owners have a habit of co-mingling their finances with their personal money, and while it may be the easiest, most convenient, and cheapest way of operating, it can have its drawbacks – especially further down the line.

‘Not having a separate business bank account means also storing up a lot of hassle for yourself in the future’

Any prospective business owner should treat their business as a business, regardless of whether it’s a part-time venture or not; while setting up a separate business bank account means additional bank fees and expenses, not having one means also storing up a lot of hassle for yourself in the future.

Many people already in business will vouch that keeping your business spending separate to your personal account ensures better manageability.

While many business current accounts available charge you for their services, there are others which waiver the charge as long as you pay in more than a certain amount each month.

Make sure to shop around for the best options to take advantage of the best deals – don’t assume that your personal bank will be the smartest choice for business use.

Of course, you do not have to sign up for a business bank account if you are either a sole trader or part of a partnership.

However, if you have a limited company you will need to have a dedicated business current account as it legally a separate entity and will need to be run separately.

Why you need a business bank account

If you’re still convinced that incorporating your business finances with your personal money is a good idea, here are some reasons why you should think again:

Having a hobby business

It’d be extremely difficult to prove to the Government that you are trying to run a legitimate business if your finances don’t reflect this.

It’s a rule that only true businesses can deduct business expenses – running your business with your personal account may seem as though it’s more of a hobby business (i.e., not-for-profit), and you may have to prove otherwise.

Filing your tax return

Trying to get your taxes in order can be a pain at the best of times, let alone when you’re trying to navigate your way through your personal finance statements to find the business-related expenses.

Personal transactions must remain completely separate from business ones, which is bound to be more complicated if you’ve combined them.

It would also be easy to miss deductions if you’re searching through your personal current account.

Whether it’s you, or an accountant, who completes your tax return, tidier, well-kept records will ensure that you can claim back every penny.

If you operate from a separate business bank account, you’ll be able to provide a clear audit trail, too.

Professionalism

If your business operates from its own separate business account you will be demonstrating complete professionalism – definitely a plus point when working with clients and attracting new business.

Remember, your business is a business, no matter how big it is, and treating it as such will give it the best chance of flourishing.

What is a business bank account?

Most banks offer the option to open a dedicated business bank account. You’ll have access to business-related financial products – such as loans, credit cards and overdrafts – to help you as your business needs change, whether that’s paying for everyday running costs or investing in your scale-up plans.

As well as keeping your business finances separate from your personal finances, a business bank account might include additional services such as:

• Budgeting tools
• Automated expense categorisation
• Account management
• Integration with accounting software

8 questions to ask when you’re looking for a business bank account

#1 – Does it offer free banking for joiners?

From high street to online-only banking, research the full range of business bank account options available and compare introductory offers.

Normally, new businesses get charge-free periods (e.g. first 12 or 18 months), possibly followed by discounted standard charges or fees for a fixed period. Less generous introductory deals are also available to businesses that want to switch banks.

What are the best business bank accounts in the UK? Make the right decision about your small business bank account, whether you’re just starting out or you’re more established

#2 – Does it offer an overdraft facility?

Having an overdraft facility can be incredibly useful – cash flow is the number one reason why businesses go under. However, this is not always available – especially with digital-only banks.

#3 – Will you have a business relationship manager?

Having somebody on the end of a phone or an email who understands your business, and preferably can make lending decisions themselves, is also helpful. Better that than an anonymous call centre and “computer says no.”

#4 – What is the quality of its mobile banking and online service?

One effect of the pandemic has been to drive us all to online and mobile banking. However, the user experience of high-street banking apps varies wildly.

According to the most recent Competition and Markets Authority February 2023 survey, Starling Bank was the top-ranked online and mobile business bank account.

#5 – Is it online only or does it have branches?

Digital banks have no branches at all, which can be frustrating if you have cash or cheques to pay in. Metro Bank, on the other hand, takes the opposite view and has grand foyers to encourage walk-ins. Indeed, Metro Bank ranked first for branch service in the latest CMA business banking survey.

Compare Metro Bank business banking on NerdWallet

#6 – Does it offer wider ‘how-to’ support?

Yorkshire Bank, for example, includes “how to” guides, online training modules, videos, tools and calculators. The tools and calculators include a start-up costs calculator, a break-even calculator, and a SWOT (strength, weaknesses, opportunities and threats) analysis template

#7 – How long does it take to open an account?

It usually takes between one and four weeks to open a business account, as the bank will need to carry out checks to confirm your identity, business and any directors registered to your company.

Several factors can speed up the process, such as:

• If you’re already registered at the bank with a regular current account
• If you’re a sole trader as opposed to an incorporated company
• Certain banks provide a faster service – some banks provide their estimated processing periods online

#8 – Does it offer unlimited transactions?

Some business bank accounts only allow you to make a number of transactions each day. Other banks only allow one or two methods of making deposits or withdrawals. Best to go for a bank that allows unlimited transactions, as well as online and in-person credits and withdrawals.

What happens when my free banking period is over?

Businesses normally pay monthly bank account fees of anything between £5 and £12.50 for high-street banks once introductory periods are over.

Banks may also make a small charge every time your small business:

• Withdraws cash
• Pays by cheque
• Pays in a cheque
• Pays cash in
• Pays by bank transfer
• Uses or goes over its overdraft limit
• Receives a card payment
• Receives foreign currency payments from overseas

When researching which business bank account to open, find what the bank will charge you for and when. Some high-street banks offer smaller fees for online transactions, reflecting the absence of individual service involved.

What is the best business bank account?

According to the latest CMA business banking survey, Monzo and Starling Bank tied for first place as the banks most likely to be recommended by small business owners to other SMEs.

As we have seen, Starling Bank narrowly pipped Monzo to the post when it comes to online and mobile banking services.

However, Swedish bank Handelsbanken was voted best bank when it comes to arranging an overdraft or a business loan. And Handelsbanken also won top place for account management and how the bank communicates with customers.

If you want to see all your options easily in one place, you can easily compare business bank accounts with Nerdwallet now.

More on business banking

Benefits of switching to the right business bank account – We’ve teamed up with the Current Account Switch Service to explain the benefits of switching your business bank account

The post Do you need a business bank account? Which one is right for you? appeared first on Small Business UK.

Choosing the right business bank account is an opportunity to get your business fundamentals right from the beginning. While it may be inconvenient to maintain a separate account for both your personal and business activities, it is good practice to do so to keep your accounts apart.

In this article we will step you through the process of opening a small business bank account in the UK as well as examine the benefits of doing so and give an overview of what options are out there.

Pros of having a business bank account

Having a business bank account is a good idea for most businesses; even freelancers and one-man-bands.

As a sole trader, you may want to open a business bank account for a few reasons.

Firstly, your bank may specify that a personal account is for personal use only and threaten to close your account if they see a large number of business-related transactions.

Secondly, if your personal costs are mixed up with your business costs, it could be difficult for you to inform HMRC about how much money your business has made.

Finally, having a dedicated bank account is likely to make your business appear more professional to clients and partners.

It’s important to be aware of the process to open an account, otherwise you could waste a lot of time choosing the wrong one for your needs.

What documents and details do I need?

For businesses setting up a bank account in the UK, the process is relatively straightforward, as long as you comply with the eligibility criteria. Make sure you have the following documents to hand when you open your account:

One document to prove your identity:

• Your full and valid UK or foreign passport
• Your national identity photocard
• Your full UK paper driving licence
• Your full UK or foreign photocard driving licence as issued by a member state of the EU or the EEA

One document to prove your address in the UK:

• Your full UK driving licence;
• Your full UK or foreign licence photocard driving licence as issued by a member state of the EU or EEU;
• UK or foreign bank or credit-card statement (must be less than three months old and not printed from the internet);
• UK mortgage statement (less than 12 months old and not printed from net);
• Council tax bill, payment book or exemption certificate (must be less than 12 months old);
• A letter or bill from a utility company (less than six months old, avoid mobile phone bill).

Business-wise, you’ll need:

• Your Companies House registration number (if you have one)
• Details about your business including turnover, tax information and other capital
• Details of all company directors or partners, including name, date of birth, address and National Insurance number

How to open a business bank account

The steps involved in opening a business account can vary between banks.

It’s advisable to start by researching the options online. Whether you can make your application online depends on the bank.

You should tell the bank if you have foreign shareholders and/or directors of your business and that you need a UK business bank account (rather than an international business bank account that’s held offshore).

When the bank account is open, you are free to use your local bank branch for your banking needs on a day-to-day basis.

For more information on opening a business account in the UK from abroad you can contact the government’s Invest in Great Britain & Northern Ireland hub.

Business banking monthly fees

It is typical for there to be monthly fees charged for business bank accounts and users should be aware of this before they open an account. Most UK business bank accounts come with an introductory offer such as free banking lasting for anywhere between 12-30 months.

While these are tempting, always make sure you know how much you will end up paying once the introductory period is over.

As a general rule, the more transactions you make on the account, the higher the charges are likely to be.

How long does it take to open a business bank account in the UK?

It can take anything from a matter of minutes to a matter of weeks for a bank account application in the UK to be approved and possible meetings to be arranged, so make sure you factor this time into your business planning process.

With some operators, for example Metro Bank, it is possible to walk into a branch and make an appointment that day. Digital banks promise a quick application as the process is all done online. 

Best business bank accounts in the UK

There are a variety of retail bank accounts available in the UK, including the high street banks; Barclays, HSBC, NatWest/RBS, Santander, Metro Bank, TSB and Lloyds/Bank of Scotland.

But it’s worth being aware that the best business account for your needs may not always be one of the high street banks.

When you look at business account comparisons it may also be worth considering newer-established “‘challenger” banks such as Starling Bank or Tide.

Remember that “best” is subjective and that your needs as a business are paramount. For example, look at the software that you already use, such as accounting platforms. Matthew Boyle, banking and mortgages publisher at finder, also advises you to think about the ways that you take payments. If it’s by cheque or largely by cash, it’s wise to be with a high street bank that has a branch near your business.

Here are the key accounts from both traditional banks and digital platforms.

Traditional banks

Digital banks

Read more

What are the best bank accounts in the UK?
12 of the best digital banking platforms for small businesses

The post Opening a business bank account – how-to and best accounts appeared first on Small Business UK.

With the UK facing a range of difficult economic circumstances – high inflation, supply chain problems and reduced consumer spending – many business owners will understandably be thinking carefully about their own financial situations.

And while many small business owners will be feeling the pinch at the moment, the latest official insolvency statistics show that the number of bankruptcies in Q1 2023 were 18 per cent higher than in Q1 2022. This may show the beginnings of the difficult wider economic picture and its effects on firms.

In response to the figures, Ian Hepworth, director of Funding Solutions UK, said: “Businesses are caught in a perfect storm of rising input costs, supply chain disruption, increased wage demands, labour shortages, rising interest rates, tightening supplier credit and the withdrawal of government funding. On top of all that, HMRC have started to play hardball.

“While some firms in some sectors are not only surviving but thriving, a growing number of business owners have become weary of the journey and are throwing in the towel.”

For those facing financial difficulties, or who can see a problem on the horizon, there are a range of personal insolvency options open to help them deal with their debts, including those running their own business. Regardless of the option an individual is considering, it’s important to take professional advice before making a decision. But for business owners thinking about bankruptcy, seeking advice is particularly important as going bankrupt can have serious effects on both their personal finances and their business depending on their individual circumstances.

Any business owners concerned about cash flow issues should speak to their financing provider as soon as possible to discuss what products and support may be available. These options may vary depending on their circumstances, but could include applying for or extending an overdraft, a working capital loan or other sources of finance such as invoice finance.

You can compare your options on Nerdwallet here.

Can I run a business while bankrupt?

When an individual is subject to a bankruptcy order, there will be restrictions placed on them until they are discharged from bankruptcy. These restrictions depend on whether they are a sole trader or have a limited company.

As an undischarged bankrupt (when a bankruptcy is still ongoing), you are not allowed to act as a company director. If you’re the sole director, personal bankruptcy can result in your company being liquidated.

>See also: Half a million businesses at risk of collapse without more support

Bankruptcy doesn’t have the same impact on sole traders. You can continue trading after you’ve declared yourself bankrupt, as long as you do so in your own name, or the name you traded under when you were declared bankrupt.

Whether you are a company director or sole trader, you cannot obtain credit of more than £500 from anyone without telling that person that you are an undischarged bankrupt.

Why would you be refused a business bank account?

Providers will typically undertake a credit history check when opening a current account so if you have county court judgements registered, defaulted on loans or have filed for bankruptcy providers your application is more likely to be declined. 

When you apply for an account, banks in the UK are legally required to carry out anti-money laundering (AML) and know your customer (KYC) checks to prevent criminals from using financial products or services to store and move around their money. KYC information is used to help banks adhere to the legal requirements that are in place across the globe.

These regulations require banks to perform what are known as “customer due diligence” (CDD) measures such as identifying and verifying your identity and, where applicable, the identity of any beneficial owners of the business. Lenders will also seek information on the nature of the business and where your money comes from.

For most businesses that are not subject to bankruptcy restrictions, applications for a business current account usually are successful. To help businesses to understand what information is required by business current account providers, UK Finance has worked with UK business banking account providers to establish a common set of basic information that they will need from you.

The information is included in an online guide hosted by UK Finance available here.

>See also: Business owners could sue banks that drove them into bankruptcy

Can I open a bank account if I owe another bank money?

You may be able to have a bank account if your debt with another lender is being serviced in accordance with the lending agreement and not in default. However, obtaining a new bank account if your previous bank closed your account due to unpaid loans or overdrafts is likely to be difficult.

Can I open a business account after bankruptcy?

An undischarged bankrupt is not prohibited by law from operating a bank account but there are restrictions on obtaining credit. However, banks will make commercial judgements when deciding whether to offer business accounts for undischarged bankrupts. A basic bank account may be the only type of account available.

Which banks accept bankrupts?

There are some providers which offer business bank accounts without the need to undertake a credit check. These often offer similar services to regular business bank accounts; however they do not have an overdraft facility.

As a personal customer, you can apply for a basic bank account even if you are an undischarged bankrupt or have an adverse credit history such as County Court Judgements (CCJs) or you have insolvency measure in place such as a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA), or Debt Relief Order (DRO). The largest banks in the UK offer these fee-free basic bank accounts, including Barclays, Santander, NatWest (including Royal Bank of Scotland), HSBC, Nationwide, Co-operative Bank, Lloyds (including Halifax and Bank of Scotland), TSB and Virgin Money (including Clydesdale and Yorkshire Bank). There are also new challenger banks and non-banks that offer online accounts that you may wish to consider.

MoneyHelper has useful information on how to open a basic bank account. Its website has links to several banks’ basic bank account information pages.

Mike Conroy is director, commercial finance at UK Finance

Looking to compare UK business bank accounts? Check out Nerdwallet here.

Further reading

5 steps to take if a company you supply goes into administration

The post Can I open a business bank account after bankruptcy? appeared first on Small Business UK.

Digital banking platforms, also known as Authorised Payment Institutions (API) or e-money institutions/issuers, generally don’t consider themselves to be banks, and they promise something different to their traditional competitors.

These platforms all offer an alternative to traditional high street accounts, they are quick to set up and operate entirely from your smartphone where you can access all their digital banking services.

But which one will be right for your small business depends on a number of factors, from your business size to the functionality you require. In this comprehensive guide, we compare the features and pricing of the market leading platforms.

Read on for a full breakdown or compare the best option for you now.

Digital banking platforms

On this page, you will find:

1. ANNA
2. Revolut
3. Starling Bank
4. Tide
5. Monzo
6. Airwallex
7. Coconut
8. Mettle
9. CashPlus
10. Countingup
11. SumUp
12. CardOneMoney

ANNA

ANNA is open to any UK resident who is a director of a limited company and non-limited businesses that are structured as a partnership or sole trader.

On the app you’ve got smart invoicing, creating sales and purchase invoices for you. It’ll politely chase outstanding payments that you’re owed and you’ll be notified about VAT, corporation tax and self-assessment tax return deadlines (compliant with Making Tax Digital).

ANNA offers a pay-as-you-use package; or you could pay £14.90 a month; £49.90 a month (both before VAT).

Compare ANNA business banking with NerdWallet

Revolut

Revolut is a good shout for businesses who travel and trade overseas. Customers can hold, exchange and transfer in over 150 currencies with the real exchange rate.

You can issue plastic, metal or virtual cards and track your employees spending in real time.

Revolut comes with perks and benefits from partners such as Zipcar for Business, Pact Coffee and Shopify.

In terms of accounts you’ve got:

• Free (£0 a month)
• Grow (£25 a month)
• Scale (£100 a month)
• Enterprise (bespoke – speak to Revolut)

Freelancers can choose from the free account (£0 a month), Professional (£7 a month) and Ultimate (£25 a month).

Compare Revolut business banking with NerdWallet

Starling Bank

The Starling Bank business account is open to you if you’re self-employed or the owner of a limited company or if you’re part of a limited company with multiple owners. You must have been trading for a minimum of 18 months to apply.

There’s no monthly charge on the account. To boost your business’ functionality, you can add on a toolkit for £7 a month. Extra tools include invoices and auto-matching, email integrations and VAT recorded on transactions. You’ve also got the option to add a euro business account for £2 a month or a US dollar business account for £5 a month.

If you want to deposit cash, you can do so at Post Office branches across the country. It’ll set you back 0.7 per cent (£3 minimum) per deposit.

What’s more, you can integrate it with Xero, FreeAgent and Quickbooks.

Tide

With Tide, get real-time business forecasts with the ability to predict your balance 30 days ahead. What’s more, receive actionable suggestions to improve cash flow.

You’ve also got free invoice templates and the ability to set up scheduled payments. The package is rounded off with in-app support as well as integration with Xero and QuickBooks.

There are three accounts available through Tide: Free (£0), Plus (£9.99), Pro (£18.99) and Plus Cashback (£49.99)

Compare Tide business banking with NerdWallet

Monzo

Monzo has a business account for sole traders or the directors of a registered limited company by shares (Ltd). Multi-user access is available for limited companies. Just be aware that you need to have a personal account with Monzo before you can apply for a business account.

Accounts aren’t available to the some types of businesses but this may be reviewed in future.

To limit financial crime, you can pay in £5-£300 of cash in one go, and up to £1,000 every six months.

As for features, Monzo integrates with Xero, FreeAgent and QuickBooks. With Monzo Business Pro, new Xero users can get six months of the cloud accounting platform free on the Business Pro account. It also has a Tax Pots feature, where you can set aside a percentage of your earnings to put towards tax every time you’re paid. What’s more, you can opt to be notified every time you get paid.

The pricing is on two tiers: Lite offers up the basics but for additional features like Apple Pay and Google Pay but for Tax Pots you’ll need to go Pro at £5 a month.

Airwallex

Airwallex offers a business account with domestic and international business accounts, company cards, and expense management – all in one place.

Its multi-currency account allows you to start collecting payments from your customers in their preferred currency so you can trade globally without the red tape.

The account is free and there are no set up costs, you just pay a small currency conversion fee.

Access a wealth of tools and integrations including Xero and Oracle, plus you can open an account in minutes online.

Coconut

For sole traders and limited companies (with up to two directors), Coconut has the functionality to handle banking, bookkeeping, invoicing and tax.

You can connect current accounts and credit cards from over 25 different banks including Barclays, Lloyds and Starling. Notifications will let you know that a payment has been made or received, automatically categorising it.

Sole traders can get an extra help up with tax reports to help them with their self-assessment. Of course, it has Making Tax Digital-compliant software.

See calculations of how much tax you’ll owe and tips on what expenses you can claim, maximising your tax savings.

The flat monthly fee is £9.00 – and that includes VAT.

Mettle

Mettle is part of NatWest but is an independent arm. This means that you can’t ring NatWest and expect them to assist with your Mettle account.

You’ll be eligible if you’re a sole trader or a limited company with up to two owners, though you must have a balance of less than £100,000 (or £50,000 for sole traders) to apply.

One of the main highlights is that you can create and send invoices directly from your smartphone, complete with company logo. Like Coconut, notifications will let you know when you’ve been paid. However, you’ll need to match the payment to the outstanding invoice yourself.

Again, it goes half-way there in terms of chasing overdue invoices. It’ll remind you that an invoice is overdue, but you’ll have to send the client a follow-up yourself.

Transactions-wise, you can manage recurring payments in-app, add receipts to transactions and export your expense data.

Other than that, you can sync your account with FreeAgent, Xero or QuickBooks but you can also export to CSV which is compatible with other accounting software. FreeAgent is free, saving you £150 a year.

A key consideration you must make is that the app isn’t covered by the Financial Services Compensation Scheme (FSCS). However, the account is covered under the FCA safeguarding requirements and the corresponding regulations. The purpose of safeguarding is to protect and return customer money if the company fails.

Mettle is free to use and free to join.

Cashplus

Cashplus says that it takes minutes rather than months to get an account.

It’s a good account if you already have a few members of staff on your payroll – add up to 20 additional business expense cards for your employees to use. Manage employee expense cards and travel cards centrally through an online system.

Get a business cash advance to help with cash flow and integrate it with online accounting software.

Compare Cashplus business banking with NerdWallet

Countingup

Countingup is a relatively new player in the mobile banking market.

Its business offering comes with real-time profit and loss reports, tax estimates and customised invoices.

This is best if your business is UK-based as you can’t make or receive international payments with this account as it doesn’t have an IBAN. However, you can apply for one via Countingup partner, CurrencyFair.

All accounting features appear in all of the accounts; these include receipt capture and automatically categorised transactions.

It costs £3 for those with a monthly deposit of £0-£750; £9 a month for those with a monthly deposit of £750-£7,500; or £18 a month for unlimited monthly deposits.  

Compare Countingup with NerdWallet

SumUp

The payment processing firm, SumUp, has launched a business account offering. The account, geared at freelancers, sole traders and small businesses, is free but withdrawal fees apply.

You can link your MasterCard with Apple Pay and Google Pay to make faster payments. With a SumUp card reader, you can also make a sale and access the money on the next working day, even on bank holidays and weekends.

SumUp also has a built-in invoicing tool so you can send customised invoices from your phone or your computer. Share payment links with customers through text, WhatsApp, Facebook or another platform.

CardOneMoney

The account from CardOneMoney (formerly CardOneBanking) is aimed at sole traders, limited companies or partnerships who have a turnover of up to £2m.

Add up to four additional prepaid corporate MasterCards which will link to your business account to use within your business. You can also export statements to a cloud accounting network such as Xero, Sage and FreeAgent. You can also make domestic and international payments in a range of currencies.

Pay cash into your account at the Post Office and cheques through Barclays Bank.

Just be aware that this one isn’t covered by the Financial Services Compensation Scheme either.

It’s £12.50 a month with a £55 application fee.

Compare CardOneMoney with NerdWallet

Of course, the right bank account will depend on the needs of your small business. Factor in how many employees you have, your turnover and what features will support you in the day-to-day running of the firm. Whether you choose one as your primary account or a secondary account, digital banking platforms offer up a quick and convenient alternative to contend with your high street bank.

If you want to see all your options online, compare business bank accounts with Nerdwallet now.

Related: Challenger and digital banks secure new funds to help small businesses

The post 12 of the best digital banking platforms for small business in 2023 appeared first on Small Business UK.

When you start a business, there are so many exciting things to focus on from getting the word out there and building your website to choosing the perfect business name. The admin side of setting up a business can drop to the bottom of the list but it’s important to get that right from the outset

That includes opening a business bank account. For a start, a business bank account will allow you to keep all your business transactions separate from your personal spending. This can be invaluable when it comes to tackling your end of year accounts and completing your tax return as you’ll be able to clearly see what were business expenses that you can potentially claim for.

There are other practical considerations to bear in mind. A business bank account will allow you to process salary payments, receive credit and debit card payments, carry out transactions in foreign currencies and do credit checks on potential business partners and suppliers.

You may also want to consider the appearance of your new company. Providing customers and suppliers with a dedicated business bank account rather than your own personal account details can help your business look more professional from day one.

What to look for in a banking partner

Most banks will offer a suite of core services and products that will allow you, for example, to run your business on a day-to-day basis, make and receive payments, arrange an overdraft, and so on.

However, your bank should do more than simply provide basic products – it should be a true partner to your business as it grows. Competitive rates and excellent products are important, but your bank should have a real understanding of your business, the industry you’re operating in and the challenges you may be facing.

Committed to playing an active role in your business ambitions, your bank should be able to provide insight and advice on key business issues as well as helping you make the connections you need to prosper and grow. Running a business can be quite lonely so your bank should give you access to a network of fellow business owners where you can share your experiences and learn from your peers.

Compare HSBC business banking on Nerdwallet here.

How a dedicated bank account can support your business

Life as a business owner is fast-paced and non-stop, so an account that you can use on the go, with the information you need at your fingertips can be useful. It’s all about convenience, ease of use and being able to do your banking wherever your business takes you.

HSBC Kinetic brings you more than just a business bank account – it aims to make business banking simpler and faster, giving you the freedom to run your business. It’s designed around the small business owner and alongside the features you’d expect such as making and receiving payments, and managing standing orders, it also gives you control of your business finances with categorised spending and cash flow insights. HSBC Kinetic also offers customers a little help to kick start their business, by teaming up with some great partners that offer everything from discounted broadband to inspirational office space. Full details available in the HSBC Kinetic app.

You can apply for a new business account in minutes with HSBC Kinetic. So if you’re a sole trader or single director shareholder limited company, find out more at business.hsbc.uk.

Simply download the HSBC Kinetic app and apply in minutes. With most accounts opened in 48hrs.

HSBC Kinetic is subject to eligibility and Credit Check. Terms and conditions and fees apply.

This article was written as part of a paid-for advertising content campaign with HSBC.

If you want to see your online banking options easily in one place, you can easily compare business bank accounts with Nerdwallet now.

Read more

5 benefits of using a business bank account over a personal account

The post Why you need a business bank account appeared first on Small Business UK.

The Government could support small business loans from banks indefinitely, extending the previous Covid financial support schemes.

Government officials are in talks with banks exploring ways Treasury-guaranteed small business loans could become a permanent feature, according to the Financial Times.

Over the course of the pandemic, £79,3bn business loans were made through Covid-19 financial support.

One person close to the talks told the newspaper that the focus is on supporting businesses to grow rather than just survive the pandemic or the current energy crisis.

“There is definite need for a permanent follow-up,” said a banking executive who had seen the questionnaire Government sent out to bank officials.

Among the questions asked is what level to set the Treasury guarantee (the £44bn Bounce Back Loan scheme had a 100 per cent guarantee, while the Coronavirus Business Interruption Loan Scheme was 80 per cent covered), whether personal guarantees would be needed, and what sort of companies should be eligible.

>See also: Government Bounce Back Loan for your small business

However, news that the Government is exploring ways to make state-backed guarantees for business loans permanent – encouraging historically reluctant banks to lend more freely to SMEs – is going to leave a bad taste in the mouth of those business lenders outside such a scheme.

The current Recovery Loan Scheme, which guarantees 80 per cent of a bank loan up to £10m ends on June 30. More than £3bn has been lent by British banks under the scheme, a senior industry executive told the Financial Times.

The previous Bounce Back Loan scheme has been criticised for handing out money to small businesses with few checks, leading to peer Lord Agnew calling the whole scheme “one of the most colossal cock-ups in recent government management”.

The Department for Business, Energy and Industrial Strategy believes £4.9bn could be unrecoverable through the £47.4bn Bounce Back Loan scheme.

Looking for finance? SmallBusiness.co.uk is working in partnership with trusted lenders to help you find the best business funding deals. Find out more here.

More on business lending

Best small business loans in the UK

The post Treasury small business loans could be permanent appeared first on Small Business UK.

Research conducted by the Current Account Switch Service (CASS) and Small Business has revealed that 20 per cent of small business owners are still using their personal account for their business banking.

Though it may seem more convenient to bank with your personal current account, you could be putting yourself at a disadvantage. Here, we outline some benefits of having a business bank account.

Limited functionality

While your personal account may be cheaper, you won’t be able to carry out some vital business functions in place to support small business owners. For instance, you won’t be able to cash cheques made to your account as they’ll need to be in your company’s name. It will also be easier to manage your expenses and complete your tax return if you are using separate accounts.

Greater protection for you and your business

Having a business bank account is a means of protecting your identity as the account will be under your business’ name. As the number of transactions you make will likely be higher than on your personal account, you’ll need greater security. Banks tend to have information in place to warn business banking customers of potential scams, as well as security systems that can help you spot scams.     

It keeps you safe too – if one of your accounts gets hacked, the other is more likely to still be safe.

You can compare your options on Nerdwallet here.

A better relationship with your bank

Having a business account will help you build a better relationship with your bank. You may have a business banking manager as part of your account. They can also give you advice to help drive business growth and efficiencies. As your business evolves, you may need to seek other financial assistance from them at a later stage so it’s a good idea to get acquainted with them early on.

In some cases, your bank won’t let you use your personal account for business transactions, even if you’re a sole trader. If your bank catches on that you’re using your personal account for business, they may close your account – and sever any kind of relationship that you previously had.

Build a credit rating for your business

Speaking of applying for credit, having a dedicated business account is a way of building a credit rating for your business. This can better your likelihood of securing a loan if you need one. Just make sure you manage your business account well.      

Freebies

Of course, you were expecting this one. Business bank accounts offer freebies and perks which could be useful for your operation, such as free accounting software or a card reader. Some give you a free banking period too, say 12 or 18 months.

I’m not sure which type of account I use

Rather worryingly, two per cent of survey respondents weren’t sure what type of account they had. If you’re not sure, check your online banking – it should tell you, even if it’s purely based on the name of account you have. If that doesn’t confirm it, contact your bank.

At this point it’s worth mentioning that there can be perks to having your personal and business accounts with the same bank. You may be entitled to discounts and other perks if you have both accounts with one provider – you’re depositing more money with them, after all. It does feed into a couple of the reasons mentioned above, such as building a stronger relationship, which in turn can help with moves like taking out a loan later down the line.

For those who are not happy with the account that they have, business or personal, it’s easy to switch through the Current Account Switch Service. You just need to allow at least seven working days. You can even pick a date which is convenient for you to switch. Speak to your new bank in the first instance to discuss your circumstances and switch options or find out more at the Current Account Switch Service. Your new bank will handle most of the work.

Jo Ainsley, Senior Service Lines Manager, Pay.UK said: “When starting and running a small business, there are many different factors to consider from employees to products and customer service. Ensuring you are with the correct business current account provider can help to tick off one of the things to think about.

“There remains a high number of SMEs that continue to use personal current accounts for business banking who could be missing out on key benefits and support. We know that SMEs have been hugely impacted over the last few years and so, as they move towards a new period of recovery and growth, ensuring they are with the correct business account provider is more important than ever.”

If you want to see all your options easily in one place, you can easily compare business bank accounts with Nerdwallet now.

Read more

Half of SME owners have never switched business bank account

The post 5 benefits of using a business bank account over a personal account appeared first on Small Business UK.

The Treasury may have to write off as much as £20bn worth of Covid-19 financial support on top of £4.3bn worth of Covid loans being lost to fraud.

That’s half of the £47bn lent through the Bounce Back Loan scheme alone.

And this is higher than the £18bn worth of Bounce Back Loans not being repaid that the business department has braced itself for.

>See also: Banks to get tougher on bounce back loan defaulters

Last month Lord Agnew of Oulton, the counterfraud minister, resigned over his frustration at “schoolboy errors” in oversight of Covid loan fraud, predicting billions of pounds worth of losses.

But accountancy firm Azets is talking about small businesses struggling to repay Covid loans, not fraud.

Duncan Swift, restructuring and insolvency partner at accountants Azets, said that a “substantial and increasing number of businesses are already struggling to make their loan repayments” on the Bounce Back Loan and Coronavirus Business Interruption Loan Schemes.

Under the former, £47bn was lent through 1.6 million loans, with a 100 per cent guarantee from the taxpayer; a further £26bn was lent via 110,000 CBILs, with the state providing an 80 per cent guarantee.

Swift said that companies, especially smaler businesses, “have had to endure an exceptionally difficult two years and while many have closed, many that have persevered have managed to survive only due to the loans and other Government-backed interventions. We believe that, across the UK, as much as £20 billion of all Coronavirus Business Interruption Loans and Bounce Back Loans will become defaulted in some shape or form.

“While most business owners have no intention of committing fraud, an increasing number are finding that their business lacks the assets, cash or income to meet loan repayment demands and deadlines.”

More on Covid loans

Bounce Back Loan repayment calculator – how much will your loan cost?

The post Businesses struggling to repay £20bn of Covid loans appeared first on Small Business UK.

Some business owners may be concerned about opening a business bank account when they have bad credit because of a low credit score, CCJs or bankruptcy.

To put yourself in the best position of opening a business bank account, ensure that you have fully prepared your case before meeting with potential sources of finance such as your bank manager. A detailed business plan is essential as this will demonstrate your understanding of how the business will grow, the associated risks and the behaviour of your market.

The plan will also show how your sales aspirations are deliverable and that, even if your do not achieve 100 per cent of your sales, the business can survive.

Be prepared to answer tough questions about the reasons behind your poor credit history and show that you have considered what has gone wrong in the past and how to avoid these pitfalls in the future. Click here for top tips on writing a business plan.

Ensure that you’re registered on the electoral roll at your current address as this will give your application greater legitimacy.

Can I open a business account with bad credit?

Yes, but you will be more limited. High street banks generally run credit checks so you wouldn’t be able to open an account. However, if they offer a more basic business bank account, they may not require a standard credit check.

How do I open a business account?

Open your account online, over the phone or in-branch, depending on your provider. Those who feel more comfortable online will be pleased to know that the process is often entirely online and takes less time to complete than traditional methods of opening a bank account.

What information will I need to provide?

It’ll vary depending on which provider you go with, but could be any of the following:

• Companies House registration number
• Full business address
• Estimated annual turnover
• Details of the main persons of responsibility
• Passport, driving licence and/or EU identity card
• Proof of address ( recent bank statement, recent energy bill, latest council tax bill, tenancy agreement or mortgage statement)

Which business bank accounts are available to me?

NatWest Foundation Current Account

As its name suggests, the Foundation Account is a basic account from NatWest.

The catch is that you won’t be able to apply for this account directly. It may be offered to you if you try and apply for another NatWest business account that you’re not suitable. For more information, contact the New Accounts Team on 0800 206 1962.

Digital-only banks

You may have more luck with a digital-only bank which don’t require your standard credit check.

Tide

Tide says that its account is suitable for all sizes, including freelancers.

You can manage multiple accounts, sync up with accounting software from Sage, Xero, KashFlow and more and you can open an account within minutes.

They don’t carry out credit checks; rather, they do electronic checks run by third-party services to verify your identity and do anti money laundering checks. These checks will appear on your credit report but will not affect your credit score.  

Cost

Free: £0
Plus: £99 per month
Cashback: £49.99 per month

Starling Bank

Apply for an account in around ten minutes on the Starling Bank app. There are no monthly fees and no UK payment charges.

The base account has a raft of features (though some are pretty standard) including receipt capture, free UK bank transfers and in-app and freepost cheque deposits.    

For more specialised features, there are three add-ons.

The Business Toolkit

• Create, match and send invoices ‘in a matter of clicks’
• HMRC tax calculation, tax report, and automated savings
• Record VAT and submit Making Tax Digital VAT return

>See also: Making Tax Digital April 2022 – what’s changing

Euro business account

• Exchange and hold euros
• Local account details to make and receive local payments for free
• Spend for free on card like a local using your regular business card

US dollar business account

• Hold, send and receive dollars
• Get local account details for cost-free payments
• Use your regular bank card

Starling will perform a ‘soft’ credit check which means they’ll get a request for information from credit reference agencies. It won’t be visible to other credit reference companies or affect your credit score.  

Cost

Base account: free

Add-ons (all prices include VAT)

The Business Toolkit: £7 per month
Euro Business Account: £2 per month
US dollar business account: £5 per month

ANNA Money

ANNA promises to have your business account ready in less than ten minutes and give you a debit card that miaows. You’ll get a virtual card so you can start using your account while you wait for your physical card to arrive.

ANNA is compatible with Apple Pay and Google Pay. You can also give cards to employees and set a spending limit – the app will automatically sort out their expenses.

It has an alternative credit checking system similar to Tide.

Cost

Pay as you go: Free (some charges apply)
Business: £14.90 per month
Big business: £49.90 per month

Monzo Business

With Monzo Business, you can set money aside from your balance with the Pots feature, get digital receipts and you can budget and categorise spending. Extras like Xero accounting software and multi-user access are available on the Pro version.

Monzo will perform a soft credit search when you apply.  

Cost

Lite: £0
Pro: £5 per month

Revolut

This is the right account if you do a lot of foreign currency transfers. First off, track the status of transfers in the app in real time. What’s more you can receive, hold and exchange money in over 30 currencies with no hidden fees. Set up as many sub accounts in each currency as you need.

The bulk payments feature makes paying clients and suppliers easier too.

Cost

Free: £0
Grow: £25 per month
Scale: £100 per month
Enterprise: Bespoke

You can compare your options on Nerdwallet here.

Card One Money

Order up to four cards for your team to use for expenses and add some money to them directly from your account.

On both versions of the account, you can pay in cash and cheques. With the corporate version you get your own account manager, open banking API integration and multi-level approvals for payments.

In the absence of credit checks, you will be subject to identification, residency and company checks. The insolvency status of your company will also be checked.

Cost

There is a one-off fee of £55 for signing up to the Business account.

Business: £12.50 per month
Corporate: Bespoke

Countingup

Countingup’s pricing structure is different in that your subscription fee may go up or down depending on how successful your business has been that month. It’s all in the name of fair pricing for Countingup’s customers.

All of the accounts come with receipt capture, a tax estimate tool, automated categorisation and the ability to share your account with your accountant. There are charges for ATM withdrawals, Post Office deposit and foreign currency transaction fees.

Cost

Total monthly deposits of £0-£750: £3 per month
Total monthly deposits of £750-£7,500: £9 per month
Unlimited monthly deposits: £18 per month

The first three months are free.

Cashplus

Cashplus offers card blocking and PIN retrieval as well as the ability to capture and add digital receipts in the app. Add up to 20 business cards, track certain expenses and restrict certain transactions too. What’s more, you can export statements in PDF or CSV.

Apply in as little as four minutes, with instant online decision, account number and sort code.

A credit check isn’t performed, but Cashplus will need proof that your business is based in the UK. Limited companies will also be required to confirm the date of birth and home address of any Persons of Significant Control (PSCs).

Cost

The account costs £69 a year.

Acorn Account for Businesses

Any business can have an Acorn Account for Businesses, regardless of their credit history. Open your account within 24 hours, but you’re only able to do so between Monday and Friday.

You get a dedicated account manager to deal with your accounts. You can also pay in cheques and withdraw cash from Barclays branches.

Though there won’t be a formal credit check, there will be ID and business verification tests. As long as you’re not in an ‘insolvency event’, you’ll have a decent chance of landing an account.

Cost

The account costs £12.50 a month.

There is an activation fee of £60, which includes a Giro book.

What are my other options?

One further option, if your business has high growth potential is contacting a ‘business angel’.

Business angels are wealthy, entrepreneurial individuals who provide capital in return for a proportion of your company’s shares.

They take a high personal risk in the expectation of owning part of a growing and successful business.

If you want to see all your options easily in one place, you can easily compare business bank accounts with Nerdwallet now.

Read more

Why small businesses should call upon the expert Angels

The post Opening a business bank account with bad credit appeared first on Small Business UK.

Small Business has partnered with the Current Account Switch Service to bring you vital information on switching your business bank account.

In this roundtable session, Lawrence Gosling hosts banking experts and small businesses to talk about switching business bank accounts and why entrepreneurs are hesitant about it.

The speakers are:

• Moderator: Lawrence Gosling, Editorial Director, Bonhill Group plc
• Liz Barclay, Small Business Commissioner
• Chris Pond, Chair, Financial Inclusion Commission / CASS INED
• Helen Bierton, Chief Banking Officer, Starling Bank
• Jo Ainsley, Senior Services Lines Manager, Current Account Switching Service
• Edwin Rodrigues, Business Manager, Noah’s Ark Media Ltd
• Frederic Jean-Baptiste, CEO, Customs & Freight Ltd
• Suelin McCullough, Director, JSGD Ltd
• James Shadimehr, Director, Garage Nation and Events Management 

They also discuss what businesses need from their bank and why some entrepreneurs are struggling with the shift to digital.

Listen to the audio below:

Or check out the video:

Alternatively, you can have a read through the session in the transcript.

Lawrence: Welcome everybody, my name is Lawrence Gosling and I’m the editorial director of SmallBusiness.co.uk. So, today: to switch or not to switch? That is the question.

Actually, the question is: Have you ever considered, as a business owner, switching your business bank account?

Now, we’ve done some really interesting research in conjunction with the Current Account Switch Service. It says, fascinatingly, a couple of key things. Many businesses are still using their personal bank accounts to run their business through. I don’t know – I certainly wouldn’t if I was a business owner myself rather than working for a business. The second one is still after that’s quite a few years, the impression is it is really difficult to switch bank account. So, we’re going to discuss some of those issues today, in the next hour or so in a way, that I think, is going to be really useful and enjoyable because we’ve got some people from the banking side of the equation and we’ve got some business owners.

Lawrence: Let me bring in Jo Ainsley from the Current Account Switch Service. Jo, lovely to see you again, and thank you for joining me. Now, I touched on the research and you and I have spoken at greater length on that in a separate video which people can see after they’ve watched this.

Just go back to some of that research that I alluded to in my introduction about, you know, it’s still fascinates me why people would use their personal bank account to run their business. That was one of the key things that came out wasn’t it? And the reticence to switch.

Jo: Yeah, absolutely. And thanks for having me today, Lawrence. I think that there was some very, very stark output from the research that was done and from the survey and the fact that people still use a personal account to run their business. I am with you – I find that quite shocking and if we like to understand why that is. Why have people not transitioned? There’s so much that they can get this, in addition, if you are running your business through a business account – access to money management applications to relationship managers and that in itself, I think, would help businesses, no matter how large or small they are.

Lawrence: Lovely, thanks for that. Now let’s bring in the banker, Helen Bierton, from Starling Bank. I think it’s right to say at Starling you describe yourself as disruptors. I think anybody watches TV will have seen advertising from you in the last six to 12 months, which is again, obviously a sign of the growth of the business. I think you’re right to say that you’re the fastest growing banking provided for businesses… I nearly used the small businesses expression there.So, there’s £2 to put in the swear jar afterwards. More seriously, yeah, I mean that this is a core part of Starling’s proposition – to try and service and help business owners.

Helen: Absolutely, Lawrence. I’m thrilled to have the opportunity to chat with you today, and with Frederic and Edwin and James. There are so many Frederics, Edwins and Jameses out there running their own businesses. Starling set up as a business itself, just launched five years ago, and we’ve now got just over 400,000 business customers like Frederic, Edwin and James and we’re thrilled to be growing so quickly.

And our philosophy is that banking should make business lives easier – people should be able to focus on running their business and for a long time, I think, businesses have been underserved by banks and we’ve really tried to change and disrupt the way that banking works, as you described, we describe ourselves as a business disruptor ourselves.

Just to pick up on one of the points you’ve made there, why do businesses still run their accounts through personal accounts? Well, we hear a lot of those examples and a lot of it comes down to the fees that they might have to pay on the business accounts. And, of course, one of the areas we came out with and launched is a dedicated sole trader account with no monthly fees for that very reason, so that businesses can properly set up their accounts and run it as a business and then generate so many other benefits, like Jo described, so I’m thrilled to be here today. I’m thrilled to talk about how we can help businesses bank differently and I’m very excited for the session.

Lawrence: Lovely, thank you very much, Helen. Now, let me come across to you Suelin, because I think you’re in this discussion.

In the interesting space, as it were, where you are both obviously a business owner but you’re providing outsourced business solutions and support for businesses similar to Frederic, Edwin and James’.

Your business, for those who are not familiar, JGSD Limited, so we can find you online, as I did last week when we were doing some research.

So, my first question to you, is in the context of the services that you offer, have you had businesses asking you, thinking this is part of the role that your business can play?

Suelin: Absolutely. I mean, thank you for the opportunity to be here. It’s lovely to meet you all. Yeah, I sit a ‘in the middle’ role and because I obviously have my own as a business owner, I have my own banking issues and accounts and things to deal with, but equally I work with the Edwins and the Jameses and start-ups and I’ve worked with quite a number of start-ups.

And so I am actually at the start, when they are coming going, ‘Oh, I have this business idea and I want to open a bank account, and I want to set up accounting systems’ and things like that, so I help them with that. Then equally those who are already established and need a little bit of help with their bookkeeping and pointing in the right direction. So, I actually recommend a lot of services and Starling has been one that I’ve recommended quite frequently.

So yeah, it’s quite a unique position to be in and I really see the importance of really good, effective banking for small businesses, and I am definitely an advocate of one of those do not use your personal accounts and also, even when you have a business account, don’t use it for personal reasons either. I fly the flag of keeping it all nice and tidy, absolutely.

Lawrence: Lovely, thank you for that, Suelin. Chris Pond, let me bring you in.

Again, I think you’ve got an unusual place in this discussion. Obviously, you’re an independent director for the Current Account Switch Service but you’re also part of the Financial Inclusion   Commission.

So, when you look at some of these issues around business banking, particularly for businesses that don’t have a large number of employees, that are relatively young, sole traders. Are there inclusion issues, do you come across situations where people think it’s very hard for them to open a business bank account, so they do end up using their personal bank account?

Chris: To access financial services, not only bank accounts but also insurance policies savings policies, etc, that is so necessary and is more necessary now as a result of the pandemic, which many businesses have suffered badly through. Many have not been able to access, of course, the support measures which were available to take people through the pandemic. Although I don’t recommend, I think I do understand why many businesses do continue to use their personal account and switch between their personal finances and their business finances. That’s partly because many of them, especially through the pandemic, have found that their status is neither one nor the other. You’ve got some people who are moving into an aspect of self-employment to supplement their incomes. Maybe their employment income has declined or has become less secure as it moved into some aspects of self-employment.

And since they haven’t moved wholeheartedly into that, then they end up using their personal account or even their credit cards for that purpose in the meantime. Then there’s some who of course are moving the other direction, those businesses who find that they can’t sustain the self-employment and have to move into some form of employee status.

So, I understand why businesses find themselves in that position. Though as I said, I certainly wouldn’t recommend using personal accounts or personal finances for business purposes.

Lawrence: Lovely, thanks for that Chris. Now let me come to the people running the businesses day-to-day after I’ve spoken to Liz Barclay, the Small Business Commissioner.

But when it comes to the business owners and we’re just going to ask you for some really direct experiences of how you’ve found the last 18 months and address this issue of business and personal   bank accounts intertwined. Liz Barclay, Small Business Commissioner, what have you and your   colleagues found over the last two years, picking up on Chris’ point, have there been situations where people who’ve been forced because of the pandemic into different employment situations, they’ve been maybe starting businesses or what was a small business on the side has now become their main source of income. Has that come with challenges? Is that the issues that you and the team are finding that Small Business Commission? What has been the experience?

Can you hear me, Liz? Maybe not, okay let’s move on. Frederic, let me turn to you for this   question. Last week, you and I discussed some of these issues.

You’ve got your current business, Customs and Freight, and obviously you run other businesses and obviously you’ve worked in financial services before you set up on your own. Just sharing some of your banking experiences in the context of running businesses.

Frederic: Absolutely. I will just say that it’s actually puzzling to me that some business owners use their personal account because it’s actually very easy to open a business account, as long as you have a company set-up – it might be a bit different for a sole trader.

I guess my experience from knowing the banking system and understanding the banking system is that banking for a company is not just banking. It’s about management of money, it’s about invoicing, it’s about accounting. There are things that you want to be able to do to run your business successfully and my challenge is that a lot of current banking or partners that I’m using lack a bit of this 3.0 world that I will call all the applications that you can have, all the intermediaries that you can get by using apps such as accounting apps, invoicing apps.

It’s very difficult sometimes to find a bank, where they could be open to integration with any of the solution will be have a huge selection of partners, but as an entrepreneur you move very quickly to was the best solution sometimes quicker than your bank and you would like to be able to connect your bank account with any of the solutions that you have. I will give you an example which is just a business plan platform where you can create your business plan, your forecast and after you want to link that to your bank account, so you can keep following what you’ve been thinking for your business and see it materialises by linking it to your bank account. So this integration, I guess, it’s still a bit slow on the banking side, in addition to other factors.

Lawrence: Lovely, thank you very much for that, Frederic. Jo Ainsley from the Current Account Switch Service, let me come to you. That was a really interesting expression I think Frederic used there about Banking 3.0.

Have you found, in the course of the research that you and the team have done that perhaps some people still don’t realise how the banking system has evolved. They’re still very much of the view that it’s a little bit of high street base, you have to walk in do everything manually. They don’t realise even the services that you’re offering, it can all be done digitally and, importantly, can be done very, very quickly as well.

Jo: Yeah definitely, Lawrence. We are aware that there’s definitely still a belief that it’s still the main high street banks. Some people are not aware of the of the new digital bank of the new challenger banks.

I think Helen raised a very valid point earlier that there is still very much a belief that everything is the same, and everything absolutely is not the same. All of the banks that are available for business customers offer different things – some will charge you for the accounts, some won’t charge you, some might charge you but you’ll actually get additional facilities, then you would do maybe with another one.

So, I think having the awareness and the visibility of what is on offer out there and what actually works best for you and your business. That’s absolutely critical for every business owner, I believe.

Lawrence: James, let me turn to you. At Garage Nation, obviously, as you said at the outset, you’ve been running a series of events. Predominantly in the UK, for obvious reasons, the last couple of years. They will go back to being abroad, fingers crossed, over the next couple of years or so.

What is your experience? Do you use a single business bank account? Have you run stuff through your personal account? How have you done it as your business has evolved?

James: When I very first started, it was a heavily cash business around 2003-2004.

I didn’t have a huge need for a bank account at the beginning, funnily enough. When I would get any payments in my bank and I’d give my personal name over, the person would look at me funny, assuming I was just tax dodging, which is probably part of the reason why some people do it anyway.

Lawrence: I better butt in just in case HMRC are watching this, James always paid all of the taxes on behalf of his business, it wasn’t tax dodging

James: Exactly. It wasn’t tax dodging, it’s fully up-to-date.

Lawrence: Carry on.

James: Thank you, and then, after that, now you can’t survive without a bank account.

I’ve got different banks for different companies, not for any particular reason, just because that’s the way it panned out. At the moment I’ve got a Lloyd’s and NatWest and a Metro. The Metro one actually opened because of the ease of opening it compared to the other banks, because that was something I needed just to put a Buy to Let property in, and so I just wanted something simple. Whereas if it was a more complicated business, I would have gone to Lloyds because that’s the interface I’m used to and I’m very comfortable with it, but previously I’ve had Barclays and HSBC as well.

Lawrence: Interesting, lovely, thanks for that. Helen, before I bring you in, I know Chris Pond wanted to make a point off the back of what James was saying. Chris?

Chris Pond: Yes – thanks, Lawrence. I just wanted to pick up on the point that James made about the use of cash because, at the beginning of the pandemic, beginning of 2020, we had 20m people who were principally operating in cash, that was their main form of transaction. That is now down to 5m.

Those 5m still heavily dependent on it – they’re going to be in trouble when cash does disappear totally as it will in the in the years ahead. But I think we’ve got to recognise that for many businesses, there was this environment in which people expected to operate in cash and they no longer do, and therefore the need for a bank account – James talked about 2003-4, he didn’t really have a need for an account because he’s principally operating cash for quite legitimate reasons we underline, but that is an increasing imperative for businesses to have access to an account and the services that go around it.

I think, also, there’s the issue about the sense that many businesses feel that they need the support of banks as almost business advisors. Therefore the loss of the high street branches may, for many small businesses, be quite an issue that they like the idea, perhaps, of having access to those services and perhaps are not quite geared up to accessing those services which nowadays are much better online, and I think that that’s an important factor.

Lawrence: Really good point, well made, Chris. Thank you very much. Helen from Starling Bank, let me bring you in now because again you wanted to comment I think directly on something that James was saying.

Helen: It was actually on something that Frederic said, if I can go back to that. So, Frederic talked about lack of a 3.0 world, and I think this is a really fascinating point and I’ll try and bring together a couple of points that Chris and James made, really.

We have moved very far forward in terms of digital in the last two years, driven by Covid – I agree with what Chris has said.

And there’s two things that have really dominated that that trend. The first was to James’ point, the ease of account opening. We had a business, who was running a carpenter and interior design business that he just stopped when Covid happened, but he had the tools to be able to do removals so he pivoted his business, opened up a new business and needed to open an account very quickly. Ability to open an account very quickly and save time is huge for businesses, whether it’s pivoting or opening new businesses and we’ve really invested in that account opening experience of being available is so crucial, so too are those digital connections we’ve moved forward, most of the digitally.

The amount of things we do as individuals and people digitally and through our phones now and the technology has moved on in ways that can give insights and advice, and I agree with Frederic – we should be able to connect our bank accounts. And that’s why Starling have built everything on APIs and we’ve got brilliant connections to Quickbooks and Xero and all the accounting partners.

And we’ve got a developer portal, so people can connect to us as well. This is absolutely so important and banks have got to move forward and use the technology to help many, many businesses like Frederic and James’.

Lawrence: Lovely thanks for that, Helen. Now let me bring Liz Barclay, Small Business Commissioner back in.

Is what some of experiences that you and the team have been hearing from businesses that really    echo what we’ve heard from James and Frederic and maybe some issues alluded to?

Liz: I’m sorry Lawrence if I’m repeating what other people have said.

I haven’t heard some of the conversation it’s been a bit intermittent technologically and I think intermittent technologically is something that we have to be aware of.

Because there are still a lot of small businesses out there that aren’t digital, that aren’t using digital – they’re using the smartphones to make phone calls and send texts they’re not using it for banking purposes or for cloud accounting software etc, so we’ve still got to be aware that those are their needs to help to go digital.

And my concern about the use of the term SMEs is that were lumping them all together. We do tend to say we’re serving SMEs when actually what we’re doing is serving the bigger end of that market, so we need to think about the sole traders, the self-employed, the smaller micro businesses and what their needs are.

A lot of them still aren’t digital and we know that Making Tax Digital is coming down the line, and that will be a big driver for more people to go digital. But there are a lot of people who tried to set up a bank account in the days when it took such a long time you actually had your first contract, got paid your first amount of money and stuck it into your personal account because that was the only account that you have available to you. I mean I’ve been here so I’m not speaking without experience, so you then carry on using your personal account, because actually it works.

You don’t move, you don’t then think about the benefits that having a business account might bring to you, so there are still quite a lot of people in that boat. I have a few colleagues who provide admin services for small businesses, and I know that people find this extremely hard to believe. But one of those told me two weeks ago that she is still getting from her small business clients, invoices written on fag packets. Now I’m not exaggerating when I say that – not the back of envelopes but cigarette packets, and she has a box on her doorstep, into which her clients put those cigarette packets as they’re driving past. She then digitises etc, etc and sends out the invoices.

So we do have to be very careful, because there are a lot of small businesses that are simply doing the business. They haven’t got time to think beyond that. They’re not taking the time to find the right bank account, find the right cloud accounting software or whatever it might be. And we’ve got to really think carefully about how we get them to adopt digital.

I think you know, this goes much wider because it’s also about helping small businesses to get net zero, for instance. Or it’s helping small businesses to use the technology to the best advantage and sometimes the bigger businesses need to take those steps to help them do that and if you’ve not necessarily got a business bank account in the first place, then that helps not going to come from the bank because that’s not where you’re going to look for the help. So we’ve got to be really smart about thinking.

What is it that small businesses need help with and how do we direct them to the right support at the right time for the right business at sometimes there’s just too much choice, too many options and people don’t know what the questions are to ask, so I think we’ve got a big job of work still to do in order to make sure that those businesses can make the best opportunity possible.

These are really creative agile businesses, we are dependent on them, we need them for levelling up, we need them to drive the recovery of the economy.

Lawrence: Lovely, thank you very much. Now Edwin, let me turn to you and your experiences running your   business. Have you ever changed, switched your business bank account, what would prompt you and what was your experience been like with your bank for the last 18 months – two years?

Edwin: Okay, my experience has been quite positive. I think one of the reasons I’m with the bank, which is NatWest, is because I mean initially I had personal banking with them and then, as I moved to a sole trader business.I worked for a couple of years and then I moved to a sole trader business, and it was much easier for me to because, as a sole trader you’re essentially, it’s basically being an individual rather than a limited company which is separate entity, so it was a smooth transition. All had links with each other, but it’s definitely in one app so it’s much, much, much easier to operate.

But I always, believe me, I did a bit of research before starting my sole trader company, whether I should just buy with my personal banking or whether I should start a separate banking, as a sole trader, but it definitely helped me and I’ll tell you why – I was looking for a mortgage in a year’s time but in hindsight, I realised that because I separated my banking, it did help me because I had to show, I mean I had to appoint an accountant to make sure that all my incomes and expenses are properly shown and it was much easier for them to operate and then he also asked me to start a bookkeeping accounting with Quickbooks, so I started with Quickbooks so it did help me to get my mortgage in the end, so I think separating the banking did help me a lot and then eventually after a year to a year and a half, I had to start a limited company because my company was growing.

I was used NatWest and I did I thought you know it’s in my relation has been good with this bank, why not start a limited company with them? To my surprise, the business banking is actually linked on the app with the personal banking and with the sole trader banking, so it’s much easier because you’re already used to operating with that and most of the features are the same, I believe, so it just made life much easier. so overall my experience has been quite good, and even though I do see a lot of – there might be a bit of negative points, but overall it has been good and even though I do get letters to the letterbox of emails if you’d like to switch from personal to business banking.

There’s nothing very enticing for me to move because my experience has been okay so far. I mean it that digital is quite good, but it’s my personal opinion, because I haven’t tried any other banks. I have tried Barclays business banking, which is also good, because I’m a treasurer for my society that I live in so that has been okay, but I’ve not used it that much but I think NatWest has been okay for me, so far, my experience has been good.

Lawrence: Super, thank you very much for that, Edwin. Let me turn to you, Suelin. I’m hoping you haven’t got any clients similar to the one that Liz mentioned about dropping off – I hesitate to call them receipts – in fag packets, but I think we’ve all been in business long enough, in one way or another, and James obviously started in cash, probably some of that cash was probably in carrier bags 10 or 15 years ago.

There were some interesting points that Edwin was making there. Naturally, we’re drawn to organisations, where we’ve had a long-term business relationship it’s maybe just a human thing. Well, we’ll just stay with what we know. It’s easier. But again, he made a good point, we as business and personal it’s interweaves doesn’t it, particularly in context, like mortgages or maybe personal loans for other things?

Suelin: Yeah. I mean I do I’ve had those clients. It made me chuckle when Liz mentioned that because I’ve had those clients that turn up with bags and bags of receipts that they’ve had hidden for like five years or something. You can’t even read them because all the print’s almost gone and you’re trying to decipher what’s on there.

But then I’ve also had the pleasure of working with those clients and moving them to digital. I believe in empowering clients and I think, as much as I love organising people’s lives for them and their businesses, I do want them to be able to do it. If I decided that I was going to retire, please let that happen soon, and if I was going to retire I want them to still be able to access their bank account and know what’s going on, so I do a process of setting up simple cloud accounting software for them so that they can manage it and have that information available to them.

My own personal experience with banking is love-hate and so I’ve been with NatWest for a long time. Then I believe it was last year, there was an initiative, a switch initiative, where there was a financial initiative to switch banks and I did switch and I switched to Starling and the process, yes, is of course very easy. I think if it wasn’t last year, it was maybe it was the year before, because I’ve lost track of which year we’re in with Covid so I did switch and, as I said, the process to switch to Starling is very easy.

I think that’s definitely something that’s a real positive, and I think in the last 12 months I have actually recommended and had about five customers of mine move to Starling or actually set up from the word go to Starling. So, there are a lot of positives there and it takes away the fear because there is so much about, ‘Oh, I don’t know how it goes’, and I work with electricians and plumbers and people, as you say, they just want to get on with the job. I mean literally before this call, I had my electrician going, ‘Oh I’ve got my assessments, I don’t know how to access my emails it’s that    thing where there’s that technological fair about if you put it on the app, how am I going to do it. So it’s made it really easy for them to access banking with the likes of Starling and then I switch back to my love-hate again, which is, in my own personal walk now with Starling I love it – it’s been really good.

Then I get to my business is growing and then you have the Recovery Loan Scheme which I didn’t want £25,000 but that’s all that was on offer, and that was just it. I applied said yes, ‘You pass all the credit checks, wonderful’. Then I got a letter that said, ‘Sorry, we can’t lend you the money.’ Now, bear in mind, I didn’t actually want £25,000. But then that was just it – there is nothing else on offer.

I’m actually at a point in my business where I will also offer property management services and that’s something that I’m looking at taking as a separate on my business, and so I actually want to grow that side. So, I had a bit of a bugbear with Starling on that because I can’t speak to anyone about it. I was just another digital business and, yes, there’s a chat facility, but you don’t want to discuss your business growth on a chat facility, frankly. So, I think for me it’s that middle ground so, on the one hand, that NatWest had any real issues and where there were issues they’ve dealt with it very professionally. So, it’s the business manager element where you can go in and have a conversation and say, ‘This is where I am with my business’ and then equally it’s the digital side of things, where the ease of opening accounts. It needs to be able to go forward from there, and I think that’s a challenge for starting as well. One of my clients and has a real issue with the limit of £500 that you can pay in via the app and it caused a lot of problems because they had a cheque for £3000. The supplier actually had to send it three times because the first time it got lost and the second time there was an issue with the cheque and Starling had to send it back. I do think that that’s something that needs to be improved and while cheque payments are obviously becoming a thing of the past, there are a lot of our smaller businesses entrepreneurs who still take that as a payment – we’re talking cash, we’re talking cheques as well. I think £500 is quite a small amount of really and to be to deposit via the app and then after that you’ve got to send it in an envelope to the poster standing so definitely a challenge for Helen I would say, to take that.

I’ll just sum up because I also am part of a woman entrepreneur community and I threw it out to them, that I was going to be sat around the table and obviously some of the things that came up were definitely the fees. A lot of our smaller entrepreneurs and micro businesses who have clients, we would live in a virtual world, I offer virtual services. Copywriters can work from anywhere in the world, and so they have international clients, the fees that they’re paying on international payments. Then also the normal bank account fees they’ve said, ‘please say something about it’ because it’s really a hindrance to them being able to grow their businesses.

Lawrence: Fantastic. You raised some brilliant points and I’ve seen lots of hands going up so I’m going to do this in order. Liz Barclay’s hand went up first she was quickest on so Liz on some of the things that Suelin was talking about before we come to Frederic.

Liz Barclay: I think Suelin covered a lot of ground there. I just was thinking about the cheque situation and, yes, there are still a lot of businesses that do need access to facilities on the high street in order to put their cash in because they still operate in cash. One business said to me the other day, ‘What is this?’ ‘Cheque.’ ‘What do I do with it?’ so you’ve got two ends of the spectrum there and we’ve got to cater for all of those people who are still operating across that as a continuum isn’t it and we’re moving from one end to the other but we’re not ups, we must be sure we’re not leaving people behind.

But I do think that the big traditional banks are beginning to realise that perhaps they move too far away from not know your business situation that would have happened on the high street when you had a Mr mothering in the in the branch, who would have known everything about your business. It was much easier to go to him and say, ‘I need £5000. I don’t need £25,000, I need £5000’ and work out how to help the business to grow and quite often those bank relationship managers knew that money was the last thing that many small businesses needed. What they really needed was the support and advice that would help them to take the next step.

Quite often, businesses think that by throwing money at it, they can solve all their problems, but really there are other solutions. And I think most of the big banks, certainly, since I’ve taken over the post on July 1 and talk to all the traditional banks. They’re all looking for that move back a bit towards much more relationship-based working with small businesses. I think this is the also the point about SMEs. They are realising that they have got sole traders and freelancers and micro businesses amongst their clients.

So, they’re looking at how to treat them individually and what the personalisation of that relationship needs to be in order to help business get and do its absolute best, and I think there definitely is an improvement in that way of thinking.

Lawrence: Thanks for that, Liz. Now, Frederic, I think you had a couple of points you want to make. I know you and I talked in the past, because the issue of foreign exchange, currency issues, have come up when you and I’ve spoken. Just make the first point you wanted to make off the back of what Suelin made and we’ll talk about the currency issues.

Frederic: I guess foreign exchange make the point, such as cheques as well, which is having a lot of different banks, where you have some that can offer you some features, others can offer you some features and I guess when I look at all the features, my conclusion will be that we never switched banks but we have two or three or four different banks for my business. What happened is that if you want to work locally, we probably use a challenger bank, no problem with that. You want to start working internationally, now you’re looking more the more traditional banks, because they have a stronger infrastructure.

When I was referring to Web 3.0, I don’t think any of the banks are there yet. Yes, they’re putting an app in front of you. Yes, they’re putting a chat in front of you, but it’s related really to what we were talking about with the relationship managers. A lot of banks are doing business banking, but they’re not business banks which is entrepreneurial, you have a lot of resources, there are a lot of smart things that you do.

Can you talk with a business manager, who knows about business, who can help you to progress your business – such as Web 3.0, crypto? You use some of your assets as a collateral to make your business progress? These are really big questions that I’m really demanding about because I’ve got big ambitions for my business, but these are not answered for the moment. All banks are trying to do at the moment is make fees on this and that. They’re not thinking about making businesses work or helping them to grow, so we can become one of the partners.

So, to my point is really strong that the business bank does not exist in the UK, maybe except the British Business Bank. And you have to navigate with a lot of features that are not comparable. If you want to be successful, you will probably have three or four business accounts.

Lawrence: Okay, thanks for that and James let me bring you in. I think earlier in the conversation you    mentioned that you’ve got a number of different accounts and they’ve very much happened as a result of looking around for service that you needed support that, particular whether it was Buy to Let or some of your core festival business.

Do you tend to agree with them until Frederic’s point there that there a lot of those services that you’re seeing as a business owner, entrepreneur, they’re not necessarily directly for businesses, but they provide some of the services that bank that businesses need? So, there’s a slight mismatch in a way.

James: I think I’m probably in a different position to Frederic where my needs from a bank account are very different.

I think Frederic mentioned crypto. That’s one thing I would like to see – a way to accept crypto payments. However, I’m aware that that may come with time and not everything can happen overnight. My personal main need from a business bank account is an easy interface, to be able to view my previous transactions and set up payments from one person to another. The growth of my business wouldn’t really be impacted by having any extra services from the bank, even borrowing money because the growth strategies I have don’t actually really require lending facilities or anything like that. Mine is just more about the simplicity and ease of using the bank account and ease of being able to contact them if there is a problem as well.

Lawrence: Lovely – thanks, James. Helen from Starling Bank, before I bring you in, let me just turn to Jo at the Current Account Switch Service.

Jo, there are a few really interesting things that came out in the last couple of minutes. I saw you    nodding in a few places. One, going back to the research was, you asked some questions around whether a switching incentive, so a fee to encourage people to switch from one account to another, would be part of their decision-making process. Frederic is a tough customer so it’s not going to take a little fee to get him to switch but there’s some interesting points. In particular, I think his point about a business banking or business services – there isn’t really a business bank. Any thoughts on that broader point?

Jo: Yeah, definitely. I think you’re absolutely right. There’s lots of variation available on the market. Whether that variation is visible to people so that they can see that there’s variation for them to get what they need, I think that that is one of the challenges and certainly from the conversations that we’re having here today.

Lots of people are using different banks and different banks are offering them different things. For me, and from the research that we’ve done historically and the conversations that we’ve had historically, the monetary incentive does not trigger the same for a business customer as it does for a personal customer. We absolutely know that the personal customers see the incentive – £100, £150 or whatever it may be – and they jump for that, because that’s a good amount for them. We do have what we would deem ‘serial switchers’. People are watching these offers all the time and they’re quite happy to move their account from one bank to another and wait a few months, and then move again and get another incentive.

Business customers are absolutely not doing that at all. There was the recent business incentive scheme that was run by RBS/NatWest Group. There were lots of businesses that were encouraged to switch their account and there were different types of incentives. Many of the business customers chose not to switch their account so that monetary incentive is not always the thing that moves them.

What we see here in this conversation is every business is different. You might get two sole traders. They’ll be working very, very differently. The banks themselves need to look at what these business customers need and what it is that works for them, and that one size fits all will not work at all.

We have to make sure that there are lots of options, irrespective of whether that’s a high street bank or whether that’s a digital bank. Then the individuals can make the right decision to go to an organisation that will best serve them and support them with their business.

Lawrence: Okay – thanks, Jo.

There are a couple of hands going up. James, I know you quickly wanted to make a point – sorry, Helen – off what Jo was just saying there. James?

James: Yeah, so two of my business accounts are with NatWest and I got offered the switch scheme. I think it was quite good, it was £3000 or £4000 to switch. I was half in shock about it. You’re going to pay me £3000 or £4000 to leave you? And then they explained the reasoning behind it and I debated it until the deadline, and then I decided to move banks, one of the businesses to Metro. Even when it happened, I ended up procrastinating on the decision to the point where I missed the deadline but wasn’t even too bothered about it, because of how important the ease of using the bank is.

With Metro I always had this thing where half the time I go to login and my password wouldn’t work and I thought, ‘I’m sure I’m doing this right.’ Then my sister said the same thing with her Metro Bank and eventually the other day I spoke to them on the phone. They actually said that they have some glitch on their system that if you enter in a password wrong or if you enter something in that when you re-enter it, it remembers the previous one you put in. You can be entering the right password and then it still won’t accept it and you’ve got to reset everything and call them or get a magic word or an email in the post to reset your whole account.

It’s little things like that that have been more important than money. As Jo said, it’s not like a lot of the personal banking customers because there’s a lot more to it than money.

Lawrence: Yeah, lovely. Thank you. It’s a good point. Helen, sorry, my apologies, eventually can bring you in. You’ve probably got a long list of points you wanted to make.

Helen: I’ll try and keep it succinct, but I think the point that Jo made is the really important one here. We’ve got four very different businesses, including Suelin’s, and listening to the variety of experience in the different businesses in the different needs just in the four examples we’ve got here. I think that’s what’s really interesting about business banking is the fact that each business has its own priorities and its own needs. As a bank, we’re absolutely focused on trying to make our service, one that suits everybody.

I do just want to address Suelin’s point. Obviously, very sorry that you were declined, but we do have people available on the end of the phone 24/7 so you can speak to somebody. And I will definitely get somebody to speak to you – very happy to do that.

I think the other point that’s coming out, which is really fascinating for me, is the one thing that I hear time and time again from the businesses that I speak to is that they want their banking to be effortless, reliable and solve their problems. Because actually business owners like the ones on this call today want to run their business whether that’s growth, whether that’s running the business, they want to focus on their business and banking should make lives as simple and effortless as possible.

And linked to that, the CMA (Competition and Markets Authority) tried to bring better competition into the business banking market and have now published the CMA survey results. You can start to hear what other businesses think of the banks, and you can start to see how people rank the service they get.

And you can start to compare the services that are available, and I think that’s something that I would encourage all businesses to do.

Lawrence: Lovely. Thanks for that, Helen. Chris Pond, let me just bring you in at this point. We made some really interesting points about cash and obviously there are a lot of customers, particularly things like plumbers and electricians, hairdressers or whoever likes to pay by cash, or we have a private investor magazine and somebody sends us a cheque last week.

Anybody under the age of 40 in our office didn’t actually know what to do with a cheque which was to the point that Liz made. It was quite amusing. But from an inclusion perspective when there are hundreds of thousands, if not millions of businesses that are struggling with digital banking. Any thoughts about perhaps how you would encourage them maybe to transition and try a bit more digital so they’re not excluded.

Chris: Very much so, Lawrence. The point Liz made earlier was that many, many businesses, are not only financially excluded, but then digitally excluded as well. They don’t have the confidence or the capital, equipment or the services available to really access digital services. I’m very keen that we do find ways of helping people make that transition from a dependence on cash towards digital terms. It’s something that Helen and I have worked on in the past, to see if we can find those digital tools which really do meet the needs of businesses and indeed of individuals using their personal banking services.

At the weekend, I took the kids to a little Christmas fair locally and probably half of the traders, they were all sole traders, they couldn’t operate in anything other than cash. Frankly, I had no cash with me and they lost the sales in those circumstances, so we’ve got to find ways. The services are available now, very often the connectivity is not great, but the services are available and we’ve got to find a way of building the confidence of businesses and giving them the access to those digital tools which really could make a big difference to the prosperity of their business operations.

Lawrence: Lovely. Thanks for that, Chris. Now ladies and gentlemen, there are eight or nine minutes of the discussion. So, final thoughts. Suelin, if you don’t mind, I’ll come to you first.

The classic of the roundtable. What takeaway, what will be the message or learning for an entrepreneur who’s been watching the last 60 minutes? What would you say to that person that patch can help them take their business forward, particularly in the context of what we’ve been talking about?

Suelin: I think that the real positive is that the discussion is happening and that banks are investing time and money and effort into wanting to get it right for us and that’s really positive. I encourage entrepreneurs and smaller businesses and micro businesses to go out and to look, do the research.

 I’m not an advocate of having, like, five bank accounts because it just makes the lives of bookkeepers and accountants and even yourself [more difficult]. You have to then start keeping track of everything, so I don’t think that’s necessarily the answer either. I think the banking industry needs to find that happy medium.

I think you cannot throw the positives of high street banking out and the relationship management. I think the high street banks, and they are already doing that, are becoming more and more digital and trying to rival the likes of Starling so that again it’s good. Even though I have had my one little hiccup with Starling I am still an advocate for Starling and I will continue to recommend them, because I believe that the ease of which and you can open an account and the account is there and it takes away that, ‘Oh, you know, let me just continue to use my personal account’, because it’s pretty easy to set up. I encourage entrepreneurs, small businesses go out and do the research and have a discussion with your bank about what your needs are. And because we’re discussing it, I’m sure there will be solutions.

Lawrence: Thank you, Suelin. Just an interesting balance, as though we’re on the BBC, there are other business bank account providers other than Starling that you’ve been mentioned a few times in the last 60 minutes. But I suspect, for obvious reasons.

Liz Barclay, let me come to you. Final thoughts, really, on the discussion. Is this up to banks to do more? Is it up to businesses to do more, is this the classic were the two sides of this equation need to just, keeping us all productive with each other?

Liz: I think it’s up to us all to do more. We need more confident businesses. We need businesses that know where to look for the help that they need when they need it. We need the banks to make their relationships a priority so that they’re actually working in partnership with businesses to help them grow or not grow with it, as the case may be, because not all businesses want to grow.

But we also need the technology to improve and as it improves it gets much easier for people to use. We need the connectivity as well. I talked to somebody the other day, who said, ‘I run my business on my smartphone The only problem is, I have to stand in the middle of a field to do it.’

Obviously, there are still hiccups in those kinds of processes, and of course as younger people come on board in businesses, they’re bringing those digital skills with them. They’re not scared to ask the questions. They’re not scared to drag a small business into the digital era.

But we’ve also got to remember that we’ve got Making Tax Digital coming down the pipeline in 2024 when small businesses are going to have to be digital in order to pay their tax, etc. So there are incentives there that will push that along and I think we’ve all got to work together to make it as easy as possible for businesses to be digital, but to do their banking digitally but to talk to somebody when they need someone to talk to, and that might be three o’clock in the morning. There’s my challenge to the banks. It’s not just in-bank opening hours that we have crises about our business and want a relationship with somebody who can help, and I think the positive is that the banks are really beginning to understand that they may have moved slightly too far away from the businesses, and they need to readjust that pendulum somewhat.

Helen: Can I just say that I couldn’t agree more with what Liz said? It’s so important and that concept of being there 24/7 for our businesses is vital and long may we see many more businesses growing.

Lawrence: And Helen, can a business like yours cope with that three o’clock in the morning?

Helen: Absolutely. 24/7, 365 days a year, we’ve always got somebody there.

Lawrence: All right, lovely. Edwin, what would you like your banks or potential banks that you may use in the future to be able to offer to help you grow and continue to make your business successful?

Edwin: Like I said, I’m happy about it. The integration sometimes it’s not very seamless so that is what I’m looking for in terms of the bookkeeping. But overall, something that would entice me is, I was just thinking while this is happening, I don’t know if they can offer something like a trial period or something of that sort. I know it’s difficult but it’s just a thought really, because you get trial offers or a demo trial wherein you just look at how user-friendly that particular website is, the app is. It might be a little bit far-fetched but, while the discussion is happening, I’m just thinking, what would actually be nice. But otherwise, it has been quite a smooth ride in terms of for me with my current banking.

For me to think of banking because of the user friendliness and the comfort that I’ve been working with it for such a long time, I do not want to take a risk of moving out to another bank because you never know. There might be a few negatives with NatWest Bank, but it is something that’s manageable by me, I mean that’s something that I can cope with in my business.

Listening to some, ‘my experience is really bad’ like, for example, I have to call them for some particular thing, and you know the waiting time is too long. I do have issues with my personal banking directly with NatWest sometimes, but with my business I’ve been okay, so far, so I think I think it’s got to be a little bit more than that for me to move.

Lawrence: Thank you for that. That’s a really interesting suggestion about the demo period.

Frederic, let me come to you. I mean you’re clearly, if not already, a serial entrepreneur, you will be in the future, I can imagine you’re only going to be doing the business you are currently. What would you like out of the banking system? What does Banking 3.0 look like to you?

Frederic: I think all the points have been mentioned. The question for the banks to realise that we are the centre of the relationship as entrepreneurs and they need to provide a service.

It’s a very traditional industry, we used to have a lot of power in their hands in terms of holding your money and your deposit. But this is changing very quickly as we have seen the digitalisation of money. Obviously, this is our money – we’re creating it via work and creation of products. We should be able to manage it as we wish, as long as you stay compliant with HMRC, for example, in the UK and, at the moment that’s not appearing.

And to get back to the question of switch or not switch and to a point that Jo said that business people are not looking to switch. The reality is that when you have a business running and you have direct debit set up or money coming in, based on subscription you have for from your clients, it will be very difficult for you to switch because you will have to spend a lot of time retying all those connections, so what will happen is that, eventually, you have three or four bank accounts, so you manage your best and you try to take the most of each bank account.

So, I will say the return to the business bank, people in front of you that understand about business that are updated about what is happening in the business world, the financial world and that you can discuss with, to make your business grow is probably what needs to be happening in the banking system. I’m really torn between the old, traditional bank that drive an app and the infrastructure and the challenger banks that are fully digital but, lack a bit of infrastructure and there’s not a clear choice they accept trying to use as many as possible without really receiving this business service yet.

Lawrence: Thank you very much for those thoughts. James, for you is there anything you need or you would like to see the banking system provide to help you grow your business?

James: Nothing that I don’t think will happen over time. For example, the cryptocurrency. Being able to accept payments from there. There’s nothing that I have an issue with on a day-to-day or even year- to-year basis that gives me any concern from my banks at the moment. As long as they keep up with the times as best as possible, and it can’t all be overnight, then I’m very happy.

Lawrence: Good. Well it’s nice to have a happy customer.

So, Helen from Starling Bank, any last thoughts from yourself?

Helen: I just want to really say that I think we’ve got an incredible industry of people who are running small businesses and sole traders, that they really do play a massive role in our economy and it’s been a really tough two years. As a bank, we absolutely want to support all of those businesses, all of those creative people, and I think this has been a really, really fascinating conversation bringing many things out. I just want to say that, absolutely, Starling is using its capability to try and support businesses in that way, and we will continue to grow and do so.

Lawrence: Super. Chris, any final thoughts from you? If you’re not digital at the moment, and the way you operate your business, perhaps be brave and make tiny steps in that direction would be one of your thoughts.

Chris: Certainly that, Lawrence, and also to underline what Helen just said that that those businesses are so essential as we try to rebuild after this pandemic. We need to make sure that they get the support that they need from financial services that they’re able to access those financial services and also that we make sure that there is real choice for them in terms of the accounts that they’re using and that they know what’s available out there and that they feel safe in making a decision to move from an account which perhaps is not providing them with the best service that they need and which doesn’t really allow their business to grow in the way that it could.

Lawrence: Thank you very much for that, Chris. Jo Ainsley at the Current Account Switch Service I’ll leave the final thoughts here. One of which is perhaps to reiterate how easy it is to switch if somebody is thinking about it, but any other thoughts?

Jo: Yeah. I think what I’ve taken from today is I’ve got a real clearer sense around what are the things that stop people from wanting to even consider switching. I think there have been a few discussions here today where he talks about the elongated process of being able to open an account. It’s complicated. It feels like it’s a big task and that in itself just stops people maybe even looking and exploring so that’s something we need to try and have to see where we can understand that a little bit more to see how we can improve on that. Then ensure that the availability of the services there and that people are aware of it is very simple, to use a service to switch away once you’ve chosen where you want to go to. And it will do everything automated for you.

To go back to Frederic’s point around we then have to move, payments coming in, or payments going out, all of that is done for you, that it’s all automated so having the awareness of just how easy the services and how much effort it can take away from the business owners and the banks will deal with that for you, I think it is another key one.

And then I think the other thing for me is, we’ve heard some great stories around what the banks are doing that is really, really good for our businesses. There are some really key areas there that have come out very strong. But we’ve also highlighted a number of areas that there is still a lot more work to do and as Chris and as Liz both said, as we go through this economy and we come in through the recovery, the small businesses have felt that pain massively. The banks, whichever bank is. needs to be here to help to rebuild those businesses and to support them now through that transition, as we rebuild the economy.

I think it’s been a fantastic discussion today and the amount of information that’s been shared has been absolutely wonderful. And it’s certainly opened my eyes into some of the other areas that we need to support with as we go forward and to continue these conversations for some time to come.

Lawrence: Jo, thank you very much for your time and those final thoughts.

To everybody who’s been on the panel discussion today, I’d just like to echo Jo’s thoughts. There are some lively, informative views and comments that came out that I hope to you the audience for that you found it useful. I’m sure it’s triggered loads of questions in your own mind. If it has, please get in touch with your own banking provider. Go and have a look at the CASS website, if you’re, getting to Jo’s point, not entirely sure what it takes to move a business bank account.

You’ll see lots of impartial, independent information. CASS is an independent organisation that doesn’t recommend anybody.

But if you’ve got any specific inquiries, please just post them on the question function that will be part of the website and we’ll try and get them directed in the right way for you. But from me, Lawrence Gosling, and my panel, thank you very much for joining us today.

Read more

Half of SME owners have never switched bank account

The post Business banking, switching and the digital revolution appeared first on Small Business UK.

What is the BBRS?

The Business Banking Resolution Service was launched in February this year, and is already helping small businesses who have had problems with their banks.

It is a free, voluntary scheme involving seven of the main business banks. Between them, these seven banks cover over 90 per cent of the SME banking market in the UK. It deals with unresolved disputes between larger SME customers and their banking services providers.

It is independent and the banks – which have signed up to a contract detailing the service – must accept its determinations. The BBRS can help UK registered businesses, partnerships, trusts, charities, friendly societies and co-operative societies.

How does it differ from the FOS?

The Financial Ombudsman Service (FOS) is a scheme set up by statute for individuals and smaller SMEs. The BBRS has been designed so that it does not overlap with the FOS, but rather dovetails with the FOS’s rules. If your SME is not the right size for one it is likely to be right for the other, and the BBRS will refer you to the other organisation if it cannot help.

I’m a small business – can the BBRS help me?

It depends on your size and when your complaint relates to. There are two types of case it can deal with: historical or contemporary.

• For historical cases (from 1 December 2001 to 31 March 2019) businesses too large for FOS must have a turnover of less than £6.5m per annum; and total assets up to £5m
• For contemporary cases (from 1 April 2019 onwards) businesses too large for FOS must have a turnover/income of less than £10m per annum; and total assets up to £7.5m.

You need to be a UK-registered business, trust, charity, friendly society or co-operative society.

You also need to be a business customer of one of the banks in our scheme (or one of their subsidiaries). The banks are:

• Barclays
• Danske Bank
• HSBC UK
• Lloyds Banking Group (including Lloyds Bank and Bank of Scotland)
• NatWest Group (including Royal Bank of Scotland, NatWest and Ulster Bank Northern Ireland)
• Santander UK plc
• Virgin Money (including Clydesdale Bank and Yorkshire Bank)

How do I use the service?

The easiest way is to register through the BBRS website. The process is simple. You might, instead, want to talk to the BBRS or email it first. It is worth discussing the different features of its service to ensure you are within the scope of what it does. You do not need a legal adviser or a claims management company to help you. The service is designed to be used by people themselves. Once your case is underway, the BBRS will assign you a “customer champion” to help guide you throughout the process.

My complaint is quite old – will it still be listened to?

Yes, potentially – the BBRS can take cases dating back to December 2001, providing you fit in within the limits on business size. Remember – you need to have already made a complaint to your bank that you feel has not been properly dealt with. That is where the BBRS comes in.

I had a problem because of coronavirus – does that count?

Yes, potentially. The BBRS can help if you have had a problem with a CBILS loan for example. Bounce Back Loans are, however, specifically excluded from the scheme – these were aimed at smaller SMEs. But you may also have had a problem with your general banking services during the pandemic, and the BBRS may be able to help if you feel the bank hasn’t properly dealt with your complaint about what they did.

I think I lost money because of what my bank did – how can BBRS help?

The BBRS can order the bank to make a payment to you. The banks are bound to pay awards made by BBRS within the limits in the scheme rules. For cases in the historical scheme this is £350,000, in line with the Financial Ombudsman Service. For the contemporary scheme, it is £600,000. BBRS can and will, however, recommend an award above these amounts, where appropriate, and the bank is required to consider these recommendations reasonably and in good faith. The banks have formally acknowledged the expectation that they will pay amounts the BBRS recommends above the binding limit, but it is ultimately their decision whether or not to do so.

Where the BBRS makes a recommendation, the bank should let the resolution service and the customer know whether they will meet it before the customer has to decide whether or not to accept the award. If a bank agrees to meet the BBRS’s recommendation, it will become binding on them like the rest of the award. If it declines to do so, it must give its reasons to both the customer and the BBRS.

The company that had a problem with the bank is out of business now – am I too late?

Possibly not. The BBRS may still be able to help. It does have special rules relating to companies that have been dissolved. The situation can be complex but it may be able to help, so the resolution service recommends getting in touch as soon as possible.

I’m not sure if I qualify for the scheme – what should I do?

The BBRS encourages all SMEs of the size it was set up with to lease get in touch and register for its service

What is ADR and how is it better than going to court?

Alternative Dispute Resolution (ADR) is exactly what it says – an alternative way of resolving a dispute. With the BBRS, that could mean a negotiation followed by a settlement between you and the bank, or some form of mediation by us between you and the bank, or an investigation by the BBRS followed by a decision from us about your case (“investigative adjudication”).

Its processes allow for much more flexibility than the rigid rules that are usually involved in litigation, and its assessments are on a “fair and reasonable” basis, rather than what is “legal”.

Many people find these processes less stressful and less risky than going to court, which can take a long time, be expensive and expose you to the risk of paying the other side’s costs.

How can I get advice about my case?

You don’t need a lawyer or a claims manager. Get in touch and the BBRS will be able to guide you throughout the process. If your case is right for the BBRS, it will provide you with a customer champion, who will help you go through the different stages.

My bank isn’t listed – does that matter?

Yes – the BBRS can only take on cases from banks that are part of the scheme or one of their subsidiaries. You may want to let the BBRS know about your complaint, as it will keep a record of the number of cases relating to banks which are not in the scheme, as part of its work includes encouraging all banks to join.

I have a disability – can the BBRS help me?

Yes – the BBRS will make reasonable adjustments to ensure that you can use the service easily.

Will the BBRS keep my personal information confidential?

Yes – the BBRS says your personal information will only be used for the purpose of resolving your complaint. However, it asks for your permission to share information with the bank you are complaining about, and that bank will have to share their information about the case with you.

What’s my first step?

The easiest way is to register through the BBRS website. The process is simple. You might, instead, want to talk to the BBRS or email first.

Further reading

Business Banking Resolution Service opens doors in November

The post What is the Business Banking Resolution Service (BBRS)? appeared first on Small Business UK.