The Quick Guide to Opening up a Business Bank Account

For most companies opening a bank account is a straight forward process. 

It involves:

• Selecting the most appropriate bank

• Selecting the services that are required

• Completing an application

• Attending the branch and meeting the branch manager

• Providing sufficient identification for the directors and shareholders

However, we appreciate that there are many companies that will find it difficult to open a bank account for a number of reasons.

For a start, the business bank accounts available to you will depend to an extent on the structure and size of your company and where it is incorporated.

Banks will have additional checks and controls in place for companies incorporated outside of the UK. 

Each bank will have their own threshold that makes it worthwhile progressing an application. 

As an example if you are planning to open a bank account for a non-UK incorporated company and you plan that your annual revenue is going to be £50k and there are very few transactions planned then generally banks will not be interested in pursuing this opportunity. 

On the other-hand if the company has much larger plans, and if this can be evidenced in any way, then some banks will be keen to explore matters further.

Banks will have additional checks to carry out on directors and significant shareholders (typically greater than 20% shareholding) where they are non-resident. 

If the banking opportunity is substantial then the banks will be prepared to invest time and resource to open the account.

All banks have specific policies on working with certain industries.  So for instance some banks will not work in the online lending sector or the adult sector. 

However, if the banking opportunity is large enough then the banks often are able to overcome their own policy. 

What do I need to set up a business bank account in the UK?

If you meet the banks eligibility criteria, then you’ll likely be asked for:

• Proof of identity and address for all directors

• Proof of identity and address for all significant shareholders (usually greater than 20%)

• Nature of the business and the legal status

• Anticipated turnover and number of transactions

• Details of any specific banking requirements. Ie foreign currencies, letter of credit, overdrafts etc.

• You will normally be required to attend the branch in the UK (unless you are already known by the bank)
  
  

 If you’re applying from abroad, you may be asked for:

• Documents to be certified or notarised

• Your UK accountant to certify certain matters.

For very significant banking opportunities banks will be prepared to send a representative to you to open the bank account.

How to pick a bank for your business

Choosing the right business bank account can not only mean lower charges and monthly fees but it can also remove a great deal of hassle from your day-to-day administrative tasks and provide you with critical support and advice when it comes to growth.

Clearly, it’s important that you take the time to decide what you need and sift through all of the available options or else, appoint someone to do this.

Here are a few tips to help you choose the right bank:

1. Know what you want.
   
   How many transactions will you make a month? What’s the lowest balance you’ll keep in the account? Having a precise idea of the services you require and how you’ll use these will help you narrow down your choices.
   
   

2. Compare the charges.
   
   Fees and charges can vary considerably, and the effect on your bottom line can be significant.
   
   

3. Compare small and large banks.
   
   Sometimes it can work in your favour to look beyond the high street banks. There are hundreds of banks based in the UK and each one will seek to focus on their own market.  The key is to be talking to banks that want you as a customer.
   
   

4. Introductory offers or long-term benefits?
   
   Some banks offer a fee-free period and while these offers may undoubtedly save you money in the short term, it’s also vital you consider the costs and charges after the introductory period ends as well as bankers that may offer advice to help you grow your business.
   
   

5. Get recommendations and introductions
   
   If your situation or requirements are not straight forward, then get a recommendation and introduction from a reputable firm of accountants is going to be of value.

Wisteria has contacts with all the first-tier banks at numerous levels; as well as many second-tier banks. Wisteria offer a service that involves:

• Assessing the situation: We'll look at how big the banking opportunity is; what sector the company is in; and whether there are any obstacles that the bank may find difficult to deal with

• Defining the banking requirements

• Assess which banks may be interested; and provide you details of these banks

• Contact the banks and where possible make an introduction

• Attend the initial meeting, if required
  
  

For assistance contact Wisteria on 020 8429 9245 www.wisteria.co.uk