I am struggling to open a business bank account for my start-up. Got rejected by 3 banks.

[Ajmal Majeed]

Hello UKBF community,


I’m new to the UK, having recently relocated from the Middle East after getting married. Back in the Middle East, I successfully ran my own business, and since moving to London, I’ve registered a new company with Companies House.


However, I’ve been struggling to open a business bank account, which has become a major hurdle. Despite trying with Barclays, HSBC, and NatWest, my applications have been declined. NatWest initially opened an account for me, but within a week, they informed me that they were closing it.


I understand that I don’t have a financial history in the UK, as I’ve only been here a few months and my company was registered just two months ago. However, I’m currently pursuing leads to secure a project for my design consultancy, and not having a business account is making it nearly impossible to move forward.


Is there something I might be missing in this process? Or is it genuinely this difficult for new companies and recent arrivals to open a business bank account in the UK? Any advice or guidance would be greatly appreciated.


Thank you!

 

[japancool]

Try Tide or Monzo.

 

[Ajmal Majeed]

Try Tide or Monzo.

Thanks for the reply, I want to eventually open sponsor license for which I need a high street bank to open a business account, not a digital based one.

 

[japancool]

Thanks for the reply, I want to eventually open sponsor license for which I need a high street bank to open a business account, not a digital based one.

Why do you need a sponsor license? Just employ whomever you need remotely.

 

[numbersrule]

If you would prefer not to employ overseas workers remotely for the roles you have in mind then you could push back on the idea that App Based Banks are not suitable. My understanding is that the Home Office have been allowing App Based Banks in some circumstances initially provided that there is a commitment to open a High Street Bank Account within a few months when your financial footprint may be more established. Make enquiries via your Licence Application contact.

 

[WaveJumper]

Did you have a business bank account in the Middle East

 

[fisicx]

@Ajmal Majeed - start trading and use your personal account and the app based bank. After 6 months of trading you can show the viability of your business and they may be more amenable to you opening an account.

Why did you feel you needed to open a limited company? You could have started out as a sole trader.

 

[MyAccountantOnline]

@Ajmal Majeed - start trading and use your personal account and the app based bank. After 6 months of trading you can show the viability of your business and they may be more amenable to you opening an account.

....

I really wouldn't recommend that for a limited company.

A limited company is a separate legal entity and needs its own bank account.

 

[Chris Ashdown]

There is many banks in the UK that are owned by banks in the Middle East. Have you contacted your last bank and enquired if they can recommend one

 

[fisicx]

I really wouldn't recommend that for a limited company.

A limited company is a separate legal entity and needs its own bank account.

I agree. But to get the bank account you need to demonstrate it’s a viable business.

 

[japancool]

OP, what is your status in the UK?

 

[Porky]

I suspect this will remain a constant challenge for you.

The bank can close your account and are not obliged to give any reason. Maybe they fear money laundering or the account being used for illicit purposes is a higher risk in your case due to you having no history. Avoid small banks like Metro with less sophisticated fraud technology last thing you want is to get an account open, transfer funds in and they freeze it.

The only thing I can come up with is for you to talk to your own private bank where you have at least the start of a relationship and see if they can help set you up a business account.

Good luck

 

[eteb3]

I really wouldn't recommend that for a limited company.

A limited company is a separate legal entity and needs its own bank account.

OP can pay a lawyer £150 for a deed of trust that makes the account the company’s in all but name.

Why do you think it’s so essential that it has its own account?

(Whether this will help at all is another question: we don’t know the details, and if what the banks are twitchy about is transfers to/from the Middle East - which country, @Ajmal Majeed ? - then that will be just as true for a personal account)

 

[MyAccountantOnline]

...

Why do you think it’s so essential that it has its own account?

...

A few reasons why I think a company needs a separate company bank account (in no particular order) -

• The directors/shareholders/company are separate legal identities and company funds belong to the company not the directors.
• It helps avoid unnecessary tax liabilities and reporting where directors loans are created if directors use personal accounts to receive and hold company funds
• It makes bookkeeping quicker and easier for the directors/company
• It avoids breaching bank rules - often using a personal account for business is not permitted
• It makes preparing accounts and tax returns easier - reducing time and costs. It can become so time consuming sorting accounts for a company where funds are going into directors bank accounts.
• It makes dealing with an HMRC Enquiry a lot easier if company finances are kept separate
• It can make applying for business finance easier
• It can create issues if the company receives cheques or payable orders in its name - they can't be banked in the directors account
• Using a private bank account may make the company appear less professional and trustworthy

 

[eteb3]

I think 1, 2 & (to a some extent) 6 of those are dealt with by using a trust, but I can see the others aren't. Thanks.

 

[fisicx]

However, the chances of someone with zero credit history or a viable business getting a business bank account is almost nil.

 

[eteb3]

It may be worth trying a credit union, assuming (rather counter-intuitively) that the Ltd won't be asking for credit.

 

[Bobbo]

Is your spouse as new to the UK as you? If not, could formally involving them in the business make getting a bank account easier as they would have some form of UK credit history a bank would see?

 

[numbersrule]

However, the chances of someone with zero credit history or a viable business getting a business bank account is almost nil.

For High Street Banks that may be true but it seems the App Based Banks are more than willing to provide business bank accounts.

 

[Paul Kelly ICHYB]

not having a business account is making it nearly impossible to move forward.

Why? Do you have people waiting to pay you?

 

[Karimbo]

Appeal with natwest. If the high steet banks are not opening. there is a chance these challenger banks wont even look at you.

I beleive being from the middle east they have your name mixed up with someone elses and is decling a busines account.

I know a few people. Even established business owners who are Muslim who have been declined a bank account because their names matched with someone elses and the banks aren't bothered to look further in.

 

[japancool]

I know a few people. Even established business owners who are Muslim who have been declined a bank account because their names matched with someone elses and the banks aren't bothered to look further in.

These people are corrupt, untrustworthy, prone to criminality and would screw you out of all your money given half a chance. I don't even know why you'd want to deal with a banker unless you absolutely had to.

 

[NickZ]

However, I’ve been struggling to open a business bank account, which has become a major hurdle.

Try spectrocoin, they give you an IBAN. Its a Latvian company. Verification you need to pass before using it.

 

[Paul Kelly ICHYB]

Latvian company

How will that help - a different country and not even a bank!

Really useful for UK banking!

 

[NickZ]

How will that help - a different country and not even a bank!

Really useful for UK banking!

What he needs is an IBAN, and he can transfer the money to his UK account, should he have one.
Internet comes from international.

 

[Paul Kelly ICHYB]

What he needs is an IBAN, and he can transfer the money to his UK account, should he have one.
Internet comes from international.

Have I got it wrong? I thought he wanted a UK bank account?

 

[fisicx]

What he needs is an IBAN, and he can transfer the money to his UK account, should he have one.
Internet comes from international.

But he doesn’t have a UK account! That’s the whole problem. Did you even read the thread?

 

[japancool]

It's a goddamned cryptocurrency exchange. A UK limited company trading via a cryptocurrency exchange??

That's probably acceptable in Nigeria. Not here.

 

[Karimbo]

---

if I was going to pay a uk supplier and they gave an IBAN it would definitely get my back up.

If I'm paying up front for a b2b service I would have to really tread carefully.

op needs to resolve this issue with nstwest. Why they closed his account. It's possible they blacklisted him and he needs to challenge the decision with them

being debanked is a horrible position. The banks are obligated to not give the reason when they shut down your bank account for aml or suspected aml reason. So you don't even know how to challenge their decision. You just have to be an open book and cover every possible reason why they may have shut your bank account and give enough evidence to appeal for every reaaon.

 

[Ivel]

Try Tide or Wise, use them for several months and apply for a High street bank account afterwards.