Difficulty getting a bank account!

[AnneBoleyn]

Has anyone else experienced difficulties in getting a business bank account for their startup?

HSBC turned us down last week which shocked us because we thought it would be entirely straightforward.

- we have banked with their subsidiary, First Direct, for 10+ years
- we have a good credit score (except we don't have any loans). No CCJs or anything like that (ever)
- we don't need a credit facility for the business
- we will be processing international payments from customers in places like Australia, which isn't exactly a money-laundering hotbed!

We called to ask why they turned us down - we were informed of the decision via a very uninformative email - and now they are going to reconsider but first we have to have an hour long phone call with their specialist team (which has to be booked a week in advance). Then, if we pass that test, we have to attend a meeting at the local branch.

All we want is a debit card and a cheque book..!

Is this normal?

 

[Paul_Rosser]

Had the same problem with Lloyds so went to Natwest and they provided one straight away.

 

[RP Branding]

Are you a sole trader, limited company etc?

When I set my sole trader account up with Barclays, it was a relatively simple process. I was worried at the time because although I knew my credit score wasn't bad, I didn't know if it was good enough to qualify for an account.

Turns out it was set up within days and they even offered me a company credit card.

 

[AnneBoleyn]

Ltd company. Newly established (well 2 months ago).

We are at the point where we need the bank account. i thought it would only take a couple of days and it would just be HSBC because they looked a tiny bit better than the others (but only if you squint really hard!).

Now I am thinking that I need to parallel run applications with several banks at once and then choose should we get more than one approval. Unless someone can tell me which bank(s) tends to be more straightforward?

God help us if we actually needed something that required a real judgement e.g. a loan application!

 

[SrS1]

We got ours without a hitch from Ulster Bank which is in the RBS group. When I sau without a hitch the local branch did send our forms to the worng place but once the business centre got them it was processed without fuss and we had everything within 5 days.

We are a new LTD company who hasn't started tarding just yet.

 

[tony84]

Slightly different as im a sole trader but RBS gave me one straight away with a free overdraft of £500 for 6 months. At the 6 months they take it away unless you pay for it.

Was in and out in about 30 minutes as they already had my details as i bank with them.

 

[MyAccountantOnline]

Its something I hear of quite regularly as an accountant acting for many small and new businesses especially for limited company bank accounts.

 

[horizon101]

I wonder : can start-up Ltd company survive without business bank account at all ?
I will need to face HSBC as well and I fear that day.

 

[Global Igloo]

Hi Anne,

Have you tried Santander? Even if you don't stay with them in the long run at least you'll have some sort of history to start off with when you want to change.

Good luck!

 

[jahangir18590]

I have a business account with a good credit rating but its become a joint company now can I get my business partner to join me in this business account.

 

[elsaid_m]

I have a business account with a good credit rating but its become a joint company now can I get my business partner to join me in this business account.

If its a limited company then yes, you just need to ring the bank and tell them that you want to add a new signatory. they will send you the required paperwork. you can also set previliges and restrictions to signatories. For instance you can say that either of you can withdraw money/write a cheque. Or both of you have to sign to withdraw money, etc...

Contact your bank manager and they should be able to take you through all the options. I think you can do the same with LLP structures aswell.

 

[elsaid_m]

Hi All,

I'll drop my 2 cents about this. I'd banked with several banks when we started our company..
1. To get up and running you can do two things. if you know someone from your local council, you can ask them to write for you an endorsement letter that you can give to the bank and tell them the reason for openning a bank account is that its obligatory for the contracts you are after to have an account.

2. show the bank that the future of the business will get an high income and no. of transactions that will be benefecial for them.

And finally, do your self a favor and avoid banking with HSBC. They are really bad when it comes to business banking for a local startup. Just head to LLoyds or even better, Barclays. they are very friendly and will get you up and running in no time. One thing you always have to bear in mind is to know what is your expected turnover and that you want a bank for regular transactions, not for one offs.

 

[munya]

What documentation would be expected by the banker? If a proof of address is needed, which address would they want the proof for?

 

[elsaid_m]

What documentation would be expected by the banker? If a proof of address is needed, which address would they want the proof for?

I can't remember all the documents needed from the top of my head to be honest, But mainly it was
1. the director's proof of identification, and proof of their residential address (two forms were needed).
Luckily first bank we banked with, I had my personal account with so they didn't need all those documents.

2. The rest of the documents about the company, they will get it automatically from compay house but you need to have the company's number, and they'll need the details from your trading address and document to proof that you are trading there. A utility bill or tenancy agreement would work.

Easiest way to do it, is pop to your local branch first(largest local branch in your area, not the remote small ones), and tell them that you want to open a bank account. They'll do you an appointment with the local bank manager and tell you what do you need to bring with you that is sometimes better than filling the form online which goes to a central location then gets filtered and then directed to the local bank manager.

( Barclays are good as they have bank manager "resident" in the bank within every area unlike lloyds where they have a bank manager that travels around the whole region and comes only on call which was the main reason we left them as we needed someone to meet up quickly rather than wait for a week for the appointment) Both bankks though have a 12 month fee-free account for startups.I think lloyds have 24 months actually aswell. Check there sites, you'll find the startup account offers.

 

[ender33]

Hsbc is a nightmare at opening business account, it took them more than 2 months to open a business account with 18 months free banking

 

[MASSEY]

I wonder : can start-up Ltd company survive without business bank account at all ?
I will need to face HSBC as well and I fear that day.

Nah, if the banks are difficult you can get paid business bank accounts with other companies, although they seem to have bad reviews as they seem to make their money holding onto peoples money for as long as possible.

it is odd how it can be so difficult to get a business account.

I think they have some sort of prejudice against people who say they don't want any credit at all like the op.

 

[marklew]

Yes credit is an incentive to them as they will make more on that than anything else (especially if offering free banking for 18 months), take the cards and don't use them is what I have tended to do in the past.

Same with the 'we buy any car' type companies claiming you can get a better deal by paying cash instead of finance is wrong too. Most car dealers want you to take finance, as they make money on that too.