Advice and Ideas for UK Small Businesses and SMEs
It could be a free banking period, an overdraft, a banking relationship manager or something entirely different.
Take a look at what's on the market, comparing features and deals (each bank may have multiple accounts).
See the small print to establish if you're eligible and if there are any restrictions you should know about.
Your company’s specific banking needs will determine the best business bank account for you, because each bank offers different features. Take the time to compare them all to discover which one fits your business’s needs best.
Budget is important, of course. Most business bank accounts will come with a free banking period, which is generally up to 18 months. Take a look at what the monthly fee is and whether it’d be affordable after the free banking period ends.
Value can be added to a bank account package in other ways, such as free accounting software or a banking relationship manager.
If you think you’ll benefit from a loan further down the line, you’ll likely be offered favourable rates as an existing customer.
Finally, support is a vital factor. Those with retail businesses will want to have one of their bank’s branches nearby, whereas an online business might be OK with customer support online. Similarly, check the bank’s customer service hours. If you run a restaurant, for example, you’ll want support available at the evenings and weekends when you’re busier.
Use the table above to compare business bank accounts, then click “see deal” next to your chosen option and follow the online application process on the bank’s own website.
It’s possible to have your online business bank account up and running in minutes, but to ensure the process is a smooth one, take the time to collect as much information as possible about your business before you apply. You should also check that your business meets any specific conditions set by the bank – such as its size or turnover.
Your company’s specific banking needs will determine the best business bank account for you, because each bank offers different features. Take the time to compare them all to discover which one fits your business’s needs best.
Your decision should be driven by your business’ needs. Think about whether the account offers a free overdraft, how long the free banking period is and how easy is it is to contact customer services. As with any financial product, it’s essential to shop around first.
Before you apply, you’ll need to gather the essential documents to show to your new bank. The likelihood is that this will involve some form of ID, proof of address and details about your directors. Find out more in our article, What are the best bank accounts in the UK?
Note that the rules only apply to existing businesses with a turnover under £6.5m, have a clearly defined ownership structure and have all its owners operating in the UK.
Once you’ve collected your documents, it’s time to choose an account. We’ve rounded up some of the favourites on the market.
Your burning questions, answered.
Yes, you can. Many banks offer business accounts that are tailored to sole traders.
You can as a sole trader, but you’d be better off with a business current account. The latter often has features to benefit business owners such as a free banking period, free accounting software and a dedicated relationship manager.
It really depends on which provider you go with. Banks can offer up to a 30-month free banking period, reverting to a standard fee thereafter. Be careful, though – with some accounts you have to stay above a certain balance to get free banking.
Yes, but you’ll need to be prepared with your business plan and other essential documents before you make your application. This will give them some confidence that you know how you’re going to grow and develop your business.
Technically, there’s no limit on how many bank accounts your business can have. As you can imagine, having an unwieldy number of business bank accounts gets confusing as you suss out what transactions went where. Most small businesses prefer a simpler approach.
Again, this depends on the bank account that you go with. Most will have an upper limit so look out for that when you’re shopping around.
You can, but the process of closing down varies from bank to bank. It will be more complicated if your balance is over a certain sum or there’s more than one signatory on the account.
The HSBC Small Business Banking Account offers up free banking for 12 months for start-ups and switchers. It's more for everyday banking. A commercial card is available to help boost your cashflow, control spending and protect you from fraud.
Tide gives business owners a few business bank account options, depending on what you want from your bank account. Everything from a simple fee-free account to a Pro account that helps you scale up as your business grows. Features include automated tax and accounting, cashflow forecasting and in-app invoice tracking. Hold up to five business accounts with Tide and get the support you need with a 24/7 fraud helpline. You can even register your limited company and get a Tide business account at the same time. They'll pay the incorporation fee on your behalf.
The Airwallex Business Account is perfect for businesses with cross-border finance needs. Free to open and maintain, it offers a cheap and fast way for UK businesses to make multi-currency global transfers to more than 150 countries and accept payments from 180. You can also open local accounts in over 60 countries and make global payments in more than 45 currencies; and you can issue corporate cards to your employees, which they can use to spend in 10 currencies without incurring FX fees.
Allica Bank offers a business account that comes with its very own banking relationship manager. On top of that, you’ve got UK-based customer support and a 4.33 per cent AER instant access pot. What’s more, you can earn up to 1 per cent cashbackon all eligible spend. All you have to do is make a card payment and you’ll be rewarded at the end of each month. If you spend over £10,000 in one month, you’ll unlock a bonus rate of 1.5 per cent for the rest of the month.
With ANNA Money’s Pay as You Go account, you only pay for what you use. Within that, you can create, send and chase professional-looking invoices, manage multiple expense cards and give your accountant access to your sales and expenses. Payments-wise, you can set up extra direct debits at no extra charge, set up scheduled payments and make bulk payments. Customer support is available 24 hours a day and, on last check, it took 36 seconds to be put through to a human. You can set up your account online within 10 minutes.
Zempler accounts are designed for freelancers and sole traders as well as small and growing businesses including limited companies, partnerships and charities. Zempler Go has no monthly fee but does have an upfront issuing fee of £9.95. Capture and add digital receipts directly in the app. On top of that, you can deposit cash at any Post Office. Integrate accounting apps such as Quickbooks, Xero and Freeagent, schedule payments and export payments in PDF or CSV format. Plus, you can take on up to 20 business cards, track expenses and restrict certain transactions.
The Counting Up business bank account is great for both sole traders and limited companies. It allows you to accept both domestic and international bank transfer and card payments, create and send professional-looking invoices in just a few taps, and automatically categorises your expenses for bookkeeping. You can apply for a Counting Up business bank account through your smartphone and, in most cases, be set up in under two hours.
The Lloyds BusinessBank Account can cater to businesses of any size. You’ll bag free banking for the first 12 months. Overdrafts of up to £5,000 could also be available, as well as access to a relationship team. Check your balances and transactions on the business banking app, make payments of up to £250,000 a day and deposit cheques of up to £5,000 a day. This account is open to you if you’re a sole trader or the only director of a limited company.
Cynergy Bank have designed a business bank account with small businesses in mind. Open to sole traders, companies and partnerships, you can do your business banking fee-free for the first 12 months. With support for up to 10 individuals on each account - including partners, directors and shareholders (who must have at least 10 per cent shareholding) - Cynergy's business bank account works for both simple and complex business structures.
The Revolut Business Account lets you do business around the world in over 25 currencies, with over 100 countries supported for payments. Spend like a local in over 150 countries too. You can also automate expenses and integrate Xero and Quickbooks accounting software. A variety of payment tools allow you pay staff and suppliers instantly at the best rate. Plus, physical and virtual payment cards that you have control of. Track, freeze and unfreeze cards as well as deciding where they can be used.
The Virgin Money M Account for Business is an account for businesses with a turnover of less than £1m. It serves everyday needs such as integrations with Xero, Sage and Quickbooks. It’s also compatible with Apple Pay and Google Pay and has lots of useful features including Mastercard discounts and in-app cheque scanning. And to help you stay in control, set your balance and weekly alerts – just as you like.
Some of the products promoted are from our banking and affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
Data is correct at time of publication, but can be subject to change. You can find the most up-to-date information by visiting the bank account provider website directly.
