If you have a small business you will need a bank account and while initially, you might start off using your personal
bank account for your business too, eventually you will want to, and find it easier to, separate them and open a business bank account. Here is a guide to the things you should consider.
What features and facilities do you require?
Firstly, you will need to work out what you need from your bank account. Do you want internet or telephone banking? Direct Debit facility? A Visa debit card? A cheque book? And so on. Make a list of your requirements, and then you can begin narrowing down the list to find a bank account to suit you.
One thing to consider is whether your existing bank account provider also provides a business account with specific facilities. If so, it makes sense to have all your accounts linked, making transfers between the two simpler. If not, don’t worry, transferring funds between different banks is not difficult.
How good is your personal credit rating?
If you have a poor credit history, this will limit the amount of bank accounts available to you. But if your credit rating is good, you will be an ideal candidate for the better accounts, which offer incentives such as a high interest rate for credits, fee free overdrafts and Direct Debit or Standing Order payments and even cash payments – Santander, for example, will pay you £100 to open your bank account with them, provided you meet criteria, as will First Direct.
Even with a terrible credit rating, you can still get a bank account, though it might need to be a Basic Account, which will have limited facilities such as no chequebook or overdraft facility. One of best of these is the Barclays Cardcash Account, which includes a Visa debit card and internet banking.
0% overdraft fees for those likely to use them a lot
If you operate a business whereby you need to pay for goods before making money from them, you will probably need to have use of an overdraft for at least some of the time. If this is the case, opt for an interest free overdraft. If you can’t get this type of account you could consider using a 0% credit card to buffer lending amounts.