Start Up Business Bank Account

[Osebz8]

Hi,
I am currently setting up my business and i would like advice on the best & cheapest business bank account to set up for my start up business. Please share your experience and knowledge.

Thanks

 

[tony84]

RBS/Natwest - 2 years free for new business. If you pass the credit check you can get an interest free overdraft for either 6-12 months which comes in pretty handy, after that it costs but you can remove it if then.

 

[Osebz8]

Thank you tony84 for your reply.

 

[terry54661]

We opened a business account with Metro Bank. Easy to set up £5 a month fee and small transactions fees for debits and so on. If you keep £5k in the account the £5 fee is written off and the first 50 transactions are free. We got our debit cards given to us in store and account set up within 5 working days it couldn't have been any easier. https://www.metrobankonline.co.uk/Commercial/Bank-Accounts/Business-Bank-Account/

 

[Osebz8]

Thanks for the information terry54661

 

[terry54661]

Thanks for the information terry54661

No problem just remember that the Metro Bank staff are really cheesy and will drive you mad lol

 

[TODonnell]

Santander worked for me. No fees, but also, no counter service, for their entry-level account. This was some years ago.

 

[Karimbo]

RBS/Natwest - 2 years free for new business. If you pass the credit check you can get an interest free overdraft for either 6-12 months which comes in pretty handy, after that it costs but you can remove it if then.

I'm with barclays and they offered an overdraft facility - I don't currently have the overdraft. I borrow off the credit card for short term funding and have a 10K limit so it works out pretty good for me - much better than an overdraft anyway because I don't want the current accounts to be in a negative balace - that's too much pressure.

I couldn't understand this costing on the barclays blurb. So just to have an overdraft available when you need it - you pay a monthly fee whether or not you use it. Is that correct?

 

[SugarCubeProductions]

I have free business banking from the Co-op

 

[iKam]

I'm with barclays and they offered an overdraft facility - I don't currently have the overdraft. I borrow off the credit card for short term funding and have a 10K limit so it works out pretty good for me - much better than an overdraft anyway because I don't want the current accounts to be in a negative balace - that's too much pressure.

I couldn't understand this costing on the barclays blurb. So just to have an overdraft available when you need it - you pay a monthly fee whether or not you use it. Is that correct?

What's the difference in having an overdraft facility being in a negative balance and the credit card which also is a negative balance until it's paid off?

IMO they are both forms of lending and when used they both are in a negative balance depending on the funds available in the current account of course. However the credit card is a negative till paid off, which is the same to an overdraft.

 

[SugarCubeProductions]

Overdrafts are generally a lot cheaper.

 

[iKam]

Exactly my thoughts. It's charged on a daily basis. And when you don't use it there's no charge. Highly flexible. Some places (trade) apply a surcharge when using a credit card. Overdraft is via debit card.

 

[Karimbo]

What's the difference in having an overdraft facility being in a negative balance and the credit card which also is a negative balance until it's paid off?

IMO they are both forms of lending and when used they both are in a negative balance depending on the funds available in the current account of course. However the credit card is a negative till paid off, which is the same to an overdraft.

Your current account is your single, primary account. If the bank calls in the overdraft (there shouldn't be any paticular reason for this if you're generally liquid and cash flow positive). BUT IF you do get into overdraft and the bank suspects something is amiss they can withdraw the overdraft facility and it could seriously affect your operations in the short term.

Credit card is an entirely seperate debt account and if the credit card issuer decides to call in the debt they can't mess with your day to day operations.

I know someone who had their overdraft facility withdrawn - they overstrentched themselves, made a few bad business decisions and used overdraft to make some risky short term decisions. The bank caught him with his pants down and cancelled the overdraft causing him to bankrupt the business.

 

[Karimbo]

Exactly my thoughts. It's charged on a daily basis. And when you don't use it there's no charge. Highly flexible. Some places (trade) apply a surcharge when using a credit card. Overdraft is via debit card.

Is it though?? read my question earlier on the page^^^. From the ads it seems that you pay a set fee for having access to overdraft whether or not you actually use it. You pay interest as well if you use overdraft.

 

[iKam]

A wise business man never puts all his eggs in one basket. If a credit card calls in the debt immediate payments still have to be made as well as the overdraft facility.

There's no win win here. If either debt is called in you must have another source of capital to pay to continue to trade.

 

[iKam]

Is it though?? read my question earlier on the page^^^. From the ads it seems that you pay a set fee for having access to overdraft whether or not you actually use it. You pay interest as well if you use overdraft.

You pay a set up fee just as you would for the credit card. The interest is only charged when you are in the overdraft. Otherwise there is no other charge.

 

[Karimbo]

You pay a set up fee just as you would for the credit card. The interest is only charged when you are in the overdraft. Otherwise there is no other charge.

isn't it a monthly fee? A credit card is a small annual fee of £32. Also credit card has lots of purchase protections on it. Overdraft does not.

My business is generally cash positiive now, but I still make purchases on credit card because it gives me protection - especially when buying stuff from my US supplier, if anything goes wrong with the order I can call up mastercard and get it sorted.

 

[Karimbo]

A wise business man never puts all his eggs in one basket. If a credit card calls in the debt immediate payments still have to be made as well as the overdraft facility.

There's no win win here. If either debt is called in you must have another source of capital to pay to continue to trade.

yeah but a credit card is an entirely seperate account and you can pay the baalnce off in a week or so if the credit card gets finicty. Your current account is your primary trading account. If they call in the debt. Your banking stops immediately. You can pay money but you can't take a penny out.

 

[iKam]

Ok.

 

[tony84]

I think you pay for the facility whether used or not. I did not need it after 6 months so removed the facility. But it was handy when starting out.

 

[Bruno Domingues]

Some banks are offering besides the 1 or 2 years free business banking also £75 free cash if you open your account with them.

Free for 25 months:
- Yorkshire Bank
- Clydesdale Bank

Free for 18 months:
- HSBC

You can also try joining the Federation of Small Businesses (FSB) and then you will get free business banking, free legal advice, access to document templates for all kind of things, very useful. You will also gain access to their business networking events so you can meet business people and potentially new partners / suppliers / clients.

 

[Aspire Utilities]

I needed one straight away so used cashplus business account which is no frills , no credit check, there are a few differences in regards to conventional high street banks.


£49 set up fee

you can deposit via post officer or direct payment into bank

no charges for transactions via card or bank transfers

There is a charge for withdrawing cash at ATM, also you have to check if you can pay in via cheque

You will have a look at the pro's and con's but no monthly free, and no transaction charge are big ones for me, as that's the only way i get paid, from my supplier it works out for me, against waiting an age for meeting with Bank account manager , etc, with this on you apply online and get account no straightaway, then 5 days for card to arrive.

Hope this helps

Paul