Business Bank Account

[IMEX Sourcing Services]

Hi,

I am planning to open my first business bank account (Sole Proprietor), and would like your advice on what are the sort of factors I should look at before deciding which bank to go with.

Also general information on what sort of Info. banks will ask for will also be helpful.

Finally, if you have any perfonal preferences towards any banks, please recommend.

Ash

[coxadmin]

Hi Ash

When I was looking for a bank account I was appalled at the charges many banks make just for paying cheques in and for almost every transaction. The I was told about the Abbey Business bank account - it's free for life and you get interest.

I've been a customer now for two years - go to Abbey Business (http://www.anbusiness.com) to find out more.

[Rob Holmes]

We use Bank of Scotland for Matrixx Hosting and HSBC for another business I own and I have to say I find nothing easy or great about either!

Rob

[IMEX Sourcing Services]

Lynn, Rob: Thanks for the suggestions.

Some more input on the factors to look for, would be most appreciated.

Ash

[stagetec]

Its very difficult for anyone on here to tell you what factors you should look for in a bank as only you can decide that.

You need to decide what services are important to you and then decide which bank is best. If all you want is straight forward banking then it doesn't really matter, so look for the one that offers the best rate.

However you might need finance, internet banking, foreign trading accounts, savings accounts or some other things so you should make a list and go hunting for the best rates.

Personally we use NatWest, we have four business accounts, four personal accounts and other stuff with them and find them very good as they are one of the few banks (as far as I know) that still have a business banking manager assigned to the account, so you always have someone you can contact, they even give you their mobile number. I always like to have someone there that I know personally who I can call and discuss any problems or queries with.

Hope this helps.

Andy

[autolycus]

Ash,

All of the big four high street bank – i.e. NatWest, Barclays, Lloyds TSB, and HSBC – offer business bank accounts and they will usually offer new business customers an introductory 12-18 months of free banking. After this time, charges will apply, although there is sometimes room for negotiation depending on how well your business is doing.

The big four banks tend to be well geared up to offer help to new businesses and will usually be able to arrange for you to see a small business adviser who will talk you through some of the things you need to consider when starting your business.

As has been said above, Abbey (formerly Abbey National) offers all businesses free banking for life, subject to certain conditions. I think Alliance & Leicester may have a similar deal??

I use Abbey for one of my businesses and the main drawback of their service is that you have no branch access and have to do all your banking by phone or internet.

That's fine most of the time. The problem comes when you want to do something out of the ordinary (e.g. a CHAPS transfer or arrange an overdraft) and then you have to ring their call centre and sit in a queue for ages.

However, if you are prepared to sacrifice some of the personal service you'd get from a high street bank in return for indefinite free business banking, this can be an option worth considering. It just depends on what kind of relationship *your* business is going to need with its bank.

In terms of what they will want from you in order to open an account, they will usually need proof of ID (e.g. passport or photo driving licence) and a separate proof of address such as a utility bill.

HTH,
Dave.

[Eagle]

Nat West here. :)

[Asteeleleith]

I am also with natwest

I went with them cos we have a current account with them as well.
I get the usual cheque book etc. Decent sized over draft consdering not much is going in there at the moment.

Although in accordance with the hype i do have a business adviser with them as well. Who to be honest when i have asked him questions about business he never seems to have answers. Not convicned with regards to the advert.

He has recommended services like accountants, plus natwest own streamline so u can get a discount off that being a natwest customer.

Plus he can off no email address, is seldom there when i call, and NEVER returns my calls.
so i do not know what to advise really on this.

Al

[Fusionhost Group]

I am with Lloyds, 18months free banking, and a business manager (bank manager hehe)

I find them very helpful and also listen to what you need and not tell you. :)

[Alpha]

Ash

to be perfectly honest it is unlikely that anyone on these forums can really recommend a bank to you (unless they have a busienss nearby)

Each bank has its own offerings and advantages/disadvantages which you need to match with your own requirements however it is often down to the individual branch manager or branch advisor which will make the difference (and these can also change regularly)

Do the top level analysis and then basically take pot luck.

you can always change after your free banking period has run out anyway :)

[fastfences]

I'm with HSBC, which is good while it's free. I've noted some of the charges and one month would have cost me £19.00. They even charge for counting cash deposits. However, the good thing with the free period is that you can learn where the major charges are applied (standing orders etc) and fine tune your banking operations by the time the fees are levied, or, as Alpha so candidly put it- change banks!
Cheers, Nigel

[Rob]

Ash,

I have written an e-book entitled ‘The Secrets of Getting Your Bank Manager to Say Yes!’ which is in the final stages of editing. Here is an extract covering what you need to know.

If you want to be on the announcement list when it’s released in a few weeks, either drop me a p.m. or just sign up for the newsletter featured on my site.

Sorry the post is so long but it should answer most of your questions!

“With competition increasing you can get some good deals if you are prepared to shop around. Also, don’t pass over the Banks which offer only telephone or Internet Banking for small businesses. If you operate a very small and simple business then an Internet only Bank account may be right for you.

So where should you look and what criteria should you use when searching for a Bank?

Your Existing Bank

If the Bank where you have your personal account offers business banking facilities then this may be a good place to start. You already know their level of service (good or bad!), the layout of the branch and perhaps some of the staff if you are lucky! This can make the whole process of opening a new account much easier.

But don’t open your business account at the same Bank just because it will be less hassle. You must still ensure that the services which go with the business account are what you are looking for and at the right cost. In a moment we will consider what you should be looking for.

A New Bank

Even if you have a good relationship with the Bank that has your personal account, don’t discount looking around. One reason to consider opening your business account at a different Bank is that of total separation between the two aspects of your life – your business and personal life.

Consider whether you want one institution to have complete control of your business and personal finances. If you do go through a sticky patch in the business, would you feel comfortable with the Bank seeing what you have sitting on your savings account?

Location

If you have no preference for a particular Bank, location of your Branch may be more of a priority, especially if you will be paying in a lot of cash where a bank just around the corner would be useful.

Some businesses have very simple needs when it comes to banking. If you don’t handle cash or large volumes of cheques and are happy banking over the telephone or Internet then location is obviously less of an issue! But be mindful that the lack of a ‘real person’ to talk to could be a frustration when you have a major problem to sort out.

Matt McGrandles of COS Media Limited, a media business based in Stirling Scotland, says, “My advice to any person is to get a Bank that allows a face-to-face relationship. This adds to the building of not only a business relationship but also a potential friendship.”

Go Hunting

If you have no particular Bank in mind, or you are only interested in getting the very best deal, visit as many as you can so you can make an informed choice. Ask to speak to the Small Business Manager or Advisor (each Bank has their own job title). Tell them you are interested in opening a Business account and that you are looking for information.

The good ones will spend time with you, offer you brochures, talk you through the process and the leaflets and tell you about their range of services. How you are treated at this early stage will give you a good idea of how you are likely to be treated later on.

Now is the chance for you to get to know about what services and benefits they can offer your business. Ask questions such as:

Do they offer on-line banking or telephone banking?

Will you have a named point of contact? Or will you be put through to the dreaded Call Centre?

At what point will you be able to apply for overdrafts or loans and what are the standard terms?

Do they provide help and support?

What are the charges to operate the account?

If you decide to open an account with them, what information such as ID or application forms will they need from you to open the account?

Do they offer an opening incentive such as 12 to 18 months free banking?

Could You Do Business With Them?

Once you have done all your research take some time to assess all the information you have gathered. Which Bank offered you the best deal? Which Bank is the most convenient? Which Bank offered the services or products most suitable to your circumstances?

I have not mentioned probably the most important aspect for many business people – the person who is going to be looking after you; your point of contact to sort out the things that will go wrong! Ask yourself whether you could get along with him or her. A good relationship with your Banker is important, something we will cover in more depth later on.

Ts Oyunjargal, who is a Business Consultant in Mongolia (yes, Small Business Success has subscribers from all over the world!) says there are 3 key things he looks for in his Bank Manager, “When looking for a Bank Manager, I want these qualities: good customer service, a willingness to listen, and of course co-operation.”

Life coach Debbie Whiteley-Grant says “I feel that a face-to-face meeting with your prospective Bank Manager is the best. Find a Bank that views you as an individual and doesn’t just work from a blueprint.”

So, based on all your findings, which Bank stands out head and shoulders above the rest? Which one did you feet most comfortable with? Make an informed decision based on all the information you have gathered and then move on to the next stage which is actually opening your account.

Opening a Bank Account

Having made your decision on which Bank to choose, go back or call up to arrange an appointment to start the account opening process. Seeking out an appointment is not only the best way to manage your time (who wants to waste valuable hours sitting around waiting in a queue?) but it also starts your relationship off on a professional basis. What kind of impression will you create if you turn up on the doorstep totally unannounced?

Items You Will Need

As with most processes today, I’m afraid you are going to need a stack of papers to get the process started! Here is some of the documentation you are likely to need to open your account:

1. a completed application form (usually filled in during the meeting)

2. identification such as a Passport or Driving Licence

3. 2 utility bills to confirm your address

4. if you are a partnership each of the partners will have to supply the above information

5. if you are trading via a Limited Company you will need the Memorandum and Articles of Association and Certificate of Incorporation

6. a Bank Mandate form (supplied by the Bank) showing a specimen signature and confirming who is to sign for Partnerships and Limited Companies

7. possibly a copy of your stationery or letterhead if you have got that far

8. anything else you can think of which will confirm you are in business

9. an outline of your business which can be in the form of a Business Plan"

Phew ….. I’m off for a coffee!!

[Alpha]

Rob

An excellent post and has the detail to be of use to all on the forums who are looking at banking arrangements.

This article should be on made sticky as a reference.

[FE]

In my opinion much depends on your personal requirements and how much interation you need with the bank.

Many offer a free period but for instance if you use predominantly internet banking Barclays is just about free for everything.

I was with Natwest and changed to Barclays as the business grew. I have found Barclays are more geared up to teh actual business where as Natwest in my eperience just let you get on with it.

FE

[Future Freak]

I'm with HSBC, which is good while it's free. I've noted some of the charges and one month would have cost me £19.00. They even charge for counting cash deposits. However, the good thing with the free period is that you can learn where the major charges are applied (standing orders etc) and fine tune your banking operations by the time the fees are levied, or, as Alpha so candidly put it- change banks!
Cheers, Nigel

I was with HSBC and the the problem that I found was that the free period was also the the period in which my business was very small - so I didn't really use the bank that much. After the free period was when I really started to use the bank properly and also paying charges. It annoyed me that I also got charged £5 when I deposited £1000 regularly in cash! (I have a unit on Camden market that deals in cash) Silly me in thinking that they liked cash and it was easier for them. I spoke to my bank manager about the charges for cash (thinking that they could come up with some flexible compromise) and his response was to try and put less cash in each month, thus the charges would be lower!!! Nerr Nerr - wrong answer!

After seeing people on here talk about how good Abbey were I crossed over the road and went there instead. Best move I ever did. I can deposit upto 3 grand a month with no charges. Only downside is no counter service available with my free bus. account - but they have lots of cash deposit machines inside and also importantly OUTSIDE the branch that it's really easy (and I also don't have to queue!)

[fastfences]

Hi FF.
Now I don't know whether you posted on this because of your banking experience or you wanted to impress me with your FF name. Actually, I was originally going to be called Future Freak Fences; now I know why I couldn't register it!

Seriously though, (now I'm really trying) excellent points about Abbey and the most valuable piece about the business being much more financial after the free period. Convinced me enough to take a look at Abbey. Thankyou.
Cheers, Nigel

[IMEX Sourcing Services]

Hi,

I would like to thank everyone who has contributed to this post. It has indeed got some great information. I will definately post here, once I decide which bank I am going with :) . and yeah, Abbey does seem attractive.

and like Alan said, I think it would be a good idea to make this post Sticky.

Ash

[Ozzy]

As mentioned above, it is mainly down to your business manager at the branch you deal with and what type of service you are personally looking for.

I bank with Natwest/RBoS and have email and mobile phone access to my business manager, direct line to his assistant and also the direct line for my personal bank account manager.

I have found Natwest to be really good for my business. Setting up an overdraft, direct debit facilities and merchant facilities was almost taken care of for me, I just had to sign the forms after they pre-filled them. (they lost the paperwork for the overdraft twice though so its not all rosy!).

I would recommend Natwest based on my own personal experience, but that doesnt mean you would get the same service level at your local branch. Its down to the individuals.

That said, one thing you could try is going to a local BNI networking group and see what bank attends there (Barclays attend my chapter) and then bank with them. They will be so keen to ensure you get looked after incase of a fallout in the chapter that you'll get first class service ;)