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Opening a business bank account is a crucial part of setting up any business. It keeps business transactions separate from your personal banking and makes bookkeeping much easier.
Advances in banking technology now offer you a range of business banking options and there are plenty of alternatives to the ‘traditional’ high street bank accounts depending on your needs.
So how do you set up a business bank account and which type might be better for you?
You’ll need to provide some information about your company to the bank when you open your account, including:
Armed with this information you can approach the bank of your choice and arrange a meeting to set up the account. Alternatively, you might choose to open a business account online or use the bank’s app.
If your business affairs are complex or there are multiple directors the bank may need to see you in person. This also determines how long it takes to open your account – if your company has straightforward affairs, for example, some banks may be able to open an account the same day if you attend a local branch.
There are typically fees associated with a business bank account, which can vary considerably between banks. The cost of a business bank account typically depends on the number of transactions that pass through the account each month.
If you organise an arranged overdraft there will also be a fee for this. Some banks make introductory offers, such as 12 months of banking with no fees, but it’s important to make sure that the account meets your needs rather than simply taking advantage of this type of offer.
Apart from keeping your business transactions separate and easy to identify for accounting purposes, setting up a business bank account supports a good credit score and keeps you on track financially.
It facilitates simpler bookkeeping and helps to ensure that you pay the correct amount of tax. Crucially, it provides reassurance to lenders and potential investors that the business is a legitimate and trustworthy entity.
This is important if you need to secure finance to grow the business – to fund expensive machinery or equipment in the future, for example, or gain access to better terms and conditions on business loans. Once your application has been accepted you should receive your account number, sort code, and debit card within a week or so.
UK Business Finance can offer more advice on how to set up a business bank account. We’re commercial finance brokers and can also guide you on the best types of funding for your business. Please contact one of the team to arrange a free consultation.
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
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