Banks refusing to open business current account

[kventures]

I am facing a pretty strange struggle in opening a business current account. I have recently registered a brand new company at companies house. I wish to import vitamins and food supplements from EU and India and then market them in UK. I have registered my company as a food business operator at my local council as well.

The problem I have been facing now is that 1 high street bank and 1 app only bank have refused to open a business current account. Obviously without a bank account, I just wouldn't be able to operate - such as paying advances to website designers, suppliers, etc.

As I have just started, except for estimates, there arent many objectionable concerns that the bank might have.

Has anyone else faced the same issue? Any pointers on which banks to approach? Additionally, any pointers on the appropriate SIC code for the business?

Any help will be appreciated.

 

[japancool]

Which high street bank have you approached?

 

[kventures]

Which high street bank have you approached?

Barclays

 

[japancool]

Did they give you a reason? Did you have a face-to-face meeting with a business manager? Barclays are usually the most reasonable high street bank.

Try HSBC or Santander.

 

[kventures]

Did they give you a reason? Did you have a face-to-face meeting with a business manager? Barclays are usually the most reasonable high street bank.

Try HSBC or Santander.

Will try HSBC or Santander. The funny part with Barclays is that I continue to have 2 business current accounts with them, so thought that it would be easier to apply.

 

[kventures]

Santander is currently not accepting new applications for business current account. Wow!

 

[Mark T Jones]

Again, did they give a reason? that might be critical.

Are you a UK resident/citizen?
Is there any hint or suggestion that your business could be u7nethical?
Is there any adverse against you or your businesses?

Try Metro if you have one near

 

[WaveJumper]

As above did you apply online to Barclays or speak with them in person if so what was their reason for not opening a third account

 

[Deleted member 59730]

The funny part with Barclays is that I continue to have 2 business current accounts with them, so thought that it would be easier to apply.

They might reasonably suppose that you should use one of your existing accounts. What good reason do you have for needing a 3rd account?

 

[kventures]

They might reasonably suppose that you should use one of your existing accounts. What good reason do you have for needing a 3rd account?

Obviously as it's a separate legal entity (company) so would the company need an account under it's own name.

 

[kventures]

Again, did they give a reason? that might be critical.

Are you a UK resident/citizen?
Is there any hint or suggestion that your business could be u7nethical?
Is there any adverse against you or your businesses?

Try Metro if you have one near

I am UK citizen
Its a startup so doesn't have a history!
Importing vitamins/food supplements, so nothing unethical (atleast my interpretation).

 

[WaveJumper]

And did you apply online or in person ?

 

[kventures]

And did you apply online or in person ?

Online, couldnt go to the branch due to the covid. Barclays sat on it for 5 weeks and then said no and didnt provide a reason.

 

[Deleted member 59730]

But the

Obviously as it's a separate legal entity (company) so would the company need an account under it's own name.

But the bank might not think you need a separate legal entity.

I once ran 5 separate businesses with one bank account.

 

[Paul Kelly ICHYB]

You do not need a separate or new bank account to start trading. This issue is an obstacle not a barrier.

As long as you keep good records of what you are spending, you could initially trade via your personal account.

 

[kventures]

You do not need a separate or new bank account to start trading. This issue is an obstacle not a barrier.

As long as you keep good records of what you are spending, you could initially trade via your personal account.

But to maintain arms length and good practice, what's wrong in having a bank account in the legal entity's name? Sure I can keep records but I am wondering about the bank's logic? Why would the bank refuse new business?

 

[Scalloway]

what's wrong in having a bank account in the legal entity's name?

A limited company should have its bank account in its own name otherwise there could be tax consequences. Having said that when I started my own limited company I used my sole trader bank account until I got a company account opened.

 

[kventures]

A limited company should have its bank account in its own name otherwise there could be tax consequences. Having said that when I started my own limited company I used my sole trader bank account until I got a company account opened.

Exactly, anyways will keep trying.

 

[Paul Kelly ICHYB]

what's wrong in having a bank account in the legal entity's name?

Absolutely nothing and it is preferred, however, not having one is not a reason to run a business.

 

[Mike Godwin]

Had the same problem with Barclays despite having been with them for over 15 years previously running a successful business. My Barclays business account manager at the time was setting up a business herself with her sister and even she couldn't get an account with Barclays! I believe she eventually went to Santander. I was eventually recommended to Nat West, by a business colleague and they couldn't have been more helpful, although I did provide them with a business plan.

It makes little sense but I've been told that Barclays were one of the biggest culprits for 'over lending' back before the global crash and the financial watchdog (whoever they are) issued them with warnings and possible fines going forward if it happens again This appears to have had the effect of turning their lending approach on its head, with them more likely to say 'no thank you' rather than 'welcome, yes please'.

 

[nelioneil]

Will try HSBC or Santander. The funny part with Barclays is that I continue to have 2 business current accounts with them, so thought that it would be easier to apply.

Speak to your business or relationship manager to see what strings they can pull.

 

[Kerwin]

I've been pretty happy with Starling bank as my business bank account. It is a mobile phone app so you can do everything on the go. You rarely need to log into your account on your PC, as most stuff is done on mobile.

 

[SillyBill]

Heard this a few times and seems it is a surprise to some that their business is not wanted, really is that simple. As SMEs we turn away business we don't want and by the same token big banks do too.

All my businesses bank with NATWEST, I recall setting another business up a few years ago and it taking ages (weeks) to get an account set up and even then I only think we got that because I had a direct line to the Relationship Manager who looks after our other businesses. Fortunately was in no rush but lesson learned that doing business with banks is not a formality.

 

[Deleted member 59730]

Heard this a few times and seems it is a surprise to some that their business is not wanted, really is that simple. As SMEs we turn away business we don't want and by the same token big banks do too.

It depends on how much you want to borrow and how much security you have. Borrowing less than £50,000 is a turn-off for some banks.

 

[Paul Kelly ICHYB]

It depends on how much you want to borrow

Many new businesses do not want to borrow, they just need banking facilities!

 

[Deleted member 59730]

Many new businesses do not want to borrow, they just need banking facilities!

That isn't how banks make money!

 

[Paul Kelly ICHYB]

Many traditional banks charge for running a business account.

 

[Socio South West]

Speak to the computer to see what strings they can pull.

Amended for correctness.... If the computer comes up with no, the moron thats operating it has to say no as well.

 

[nelioneil]

Heard this a few times and seems it is a surprise to some that their business is not wanted, really is that simple. As SMEs we turn away business we don't want and by the same token big banks do too.

Of course, we (and banks) can turn away business. But the OP already has business bank accounts with the bank, and is being rejected for another one. This seems surprising, and I think only the relationship manager can help provide some explanation.

 

[kventures]

Of course, we (and banks) can turn away business. But the OP already has business bank accounts with the bank, and is being rejected for another one. This seems surprising, and I think only the relationship manager can help provide some explanation.

Yup I have had two revenue generating business accounts with Barclays for over 10 years. Although they are not large revenues coming into the account but I have never borrowed from them. Also as someone else suggested, all I want are some banking facilities. In case, I pay a monthly fee to operate the account, so the bank is receiving *some* revenue. It is really strange that banks are refusing business.

 

[Laurent]

I'd just consider a different bank. That's not right to have to wait 5 weeks for an answer and end up being rejected without an explanation. Personally I use Revolut Business and it's been good enough so far, and the account was opened in a few days.

 

[Paulo Marques]

I am facing a pretty strange struggle in opening a business current account. I have recently registered a brand new company at companies house. I wish to import vitamins and food supplements from EU and India and then market them in UK. I have registered my company as a food business operator at my local council as well.

The problem I have been facing now is that 1 high street bank and 1 app only bank have refused to open a business current account. Obviously without a bank account, I just wouldn't be able to operate - such as paying advances to website designers, suppliers, etc.

As I have just started, except for estimates, there arent many objectionable concerns that the bank might have.

Has anyone else faced the same issue? Any pointers on which banks to approach? Additionally, any pointers on the appropriate SIC code for the business?

Any help will be appreciated.

I also started a vitamin/supplement company. I started with starling but as they do not have credit card I opened another with natwast. How is your business going? At the moment I import bulk and bottle in the UK but there are some vitamin companies in the UK that sell like 20.000 units a month on amazon of a single product.

 

[RandyMarsh]

Have you checked your personal credit rating with Experian/Equifax?

 

[ethical PR]

Will try HSBC or Santander. The funny part with Barclays is that I continue to have 2 business current accounts with them, so thought that it would be easier to apply.

What reason did they give you ?

 

[fisicx]

Yup I have had two revenue generating business accounts with Barclays for over 10 years. Although they are not large revenues coming into the account but I have never borrowed from them.

Why can’t you just your existing business bank accounts?

Consider that your low usage is one of the reasons for refusal to open a new account.

 

[japancool]

Hopefully, he's sorted it in the last 3 years.