You think up an amazing idea for a business. You carry out tireless research and put in some serious hours to find out whether your offering is needed or even wanted by your would-be customers. Eventually, you go for it. You take that leap of faith and set the ball rolling. You identify that you’ll probably be needing a business bank account, seeing as you know that using your own personal bank account probably isn’t the best idea. So who do you go with? You go with the same bank that provides your personal account. The branch is just down the road and it has ample parking on a Saturday morning, in fact, it’s actually open on a Saturday which in itself is a bonus.
Does this sound like you? Even if this isn’t you, here; we are going to cover what you ideally should know about business bank accounts.
- Firstly, going with your personal bank isn’t necessarily the best option for your business bank, regardless of how nice and helpful they are to you as an individual. This isn’t to say that your personal bank isn’t great or even that it isn’t the best option for you, but simply that doing a bit of research is key.
- This leads us on to point number two. Research and compare. Look on the internet, visit a number of branches, pick up the phone, whatever you do, please make sure you undertake ample research and really get to the bones of what is being offered and at what cost. An attractive welcome offer is nice but if; two years down the line; you’re going to get stung with heavy transaction charges, then you need to decide if it’s really that good a deal for you after all.
- Now, we are going to talk about charges. The charges we will discuss here are standing charges and transactional charges. Firstly, standing charges are either monthly or quarterly fees charged by some banks, potentially as a replacement for transaction fees or sometimes, they’re an additional fee on top. Secondly, transactional charges are fees charged for the handling of money by the bank. These charges are typically on both physical transactions, such as processing a cheque payment, as well as automated payments, such as standing orders. A top tip here is to not only shop around for an attractive option for you, but consider adapting your payment methods to minimalise the potential costs incurred in the first instance.
- Fourth on our list is interest. Most business banks offer little to nothing in the way of interest, however, some banks are now offering marginally more. Consider your options wisely to make the most out of the limited interest available for a business bank account if you have substantial capital.
- This may be an obvious one, but needless to say it’s important. It’s online banking. Not only is it a huge time saver (thus, arguably a money saver), it’s putting the power back into your own hands. Rather than having to rely on someone else to undertake slightly more laborious processes, without your sense of urgency, you’re able to execute a number of operations at the touch of a button.
- Another useful tip is to try and seek out a bank that’ll offer you an account manager; experienced with small businesses; who is able to not only assist you, but also advise you. A lot of banks actually offer this service, it’s certainly something to consider.
- Lastly, it’s important to remember that if you make an unfavourable selection, it’s always possible to switch, dependant on your contract agreement. In recent years, it’s become easier to carry out a switch, in fact, a lot of banks now will execute the entire process on your behalf, so don’t feel tied down or put off if you need to make a change.
If you’ve done your research and you’re preparing your application, have you checked your business credit report? Lenders typically use your credit report to assist with their decisions, so you’ll want to make sure that you’re able to gauge your chances of success and ensure that your business is seen in the best possible light.
If you’d like to understand your business credit report and monitor your profile too, in real-time, please click here to find out more.