Philip Brennan, MD at BusinessComparison, gives his advice into how to choose the best bank account for your new start-up business:
There are many important aspects to consider when building a start-up business, such as defining your USP, analysing your target audience, scoping out potential marketing avenues, and so on. If you’re just starting out in business, it’s important to choose the right bank account from the start.
Here at BusinessComparison, we compare the best business accounts for start-ups, and work hard to negotiate the best deals. Below are my main tips into how to find the most suited start-up business bank account for you and your business:
Decide on what aspects are most important to you
If you have specific aspects that are very important to you and your business, we’d suggest heading straight to the filter option when comparing accounts.
At the moment, our filter options include:
- Quick application process
- Longest fee free period
- Overdraft facility
- Accounts for poor credit
- Mobile application
- Low fees to pay in cash
- Accounts which pay interest
- Foreign Exchange accounts
To compare start-up business bank accounts, visit: https://www.businesscomparison.com/bank-accounts/start-up
Look for introductory offers
For a start-up, many banks will offer an introductory free banking period which means that you won’t face monthly charges for using the account. Many deals include a free business account for a specific period when you signup, and this can be up to 25 months, which saves you that little bit of money as you get started. However, other fees may apply to it’s worth checking all the details before committing.
As introductory and switcher offers are becoming more common, it’s not always the best or safest option to go with your current bank, however it is working checking just in case their offering fits into your businesses criteria and can give you a good deal as a current customer.
Remember the other aspects to consider
- Some providers have no credit checks during the application, which can help if you do not have the strongest credit rating
- If you will be regularly withdrawing money from cash points, then it might be important to find a provider which offers no UK ATM fees
- An overdraft can be useful if you need additional flexibility whilst you are finding your feet, and many start-up bank accounts have options available to add this to your account
- Being able to access your finances on the go is important for many businesses, and most providers offer online business banking (such as internet banking and mobile apps) as part of their offering as standard
- Easy integration with accounting software, as well as integrated invoicing services, can help streamline multiple processes, especially with ‘Making Tax Digital’. So, check before you commit that your accountancy software can integrate with your bank account.
- For some start-ups, having a 24/7 support team or guidance on financial management can benefit them greatly, so if this is important to you then it’s worth seeking out the options that offer these perks
- High street banks generally aren’t the cheapest to transfer money internationally, so if you intend to do this, you should look to get a specific account or use a specialised FX company
- If you intend to keep significant amounts of money in your account, it can be best to put this into a separate savings accounts and make your money work harder for you
- Don’t forget, there are other more practical aspects to consider when choosing the right business bank account for your start-up. For example, if you need to pop into a branch every now and then, is there a branch local enough for you to get to?
Speak to other business owners, and review regularly
If you are stuck when it comes to choosing the right business bank account, then speak to other business owners and learn about their experiences with different accounts and branches in the area. Remember, every business grew from a small start-up, so there are plenty of people who have been in your position before that you can ask for advice.
It is also worth remembering that once you have the account, make sure you are reviewing it on an annual basis. Businesses are covered by the 7-day switcher guarantee, so it’s worth trying out a new option if you think it could be a better fit.