Business Banking Question

[ColinJWatson]

Wondering if anyone has came accross this problem before.

 

I run my own business, and I have been declined for 2 business bank accounts due to having a poor credit rating from a few years back.

 

However, now I am looking to open my own shop, but still do not have a bank account. I mean its not like I want money from them, all I want to do is have somewhere to put my money into, so its safe and secure.

 

Anyone got any advice on what I should do next?

 

Royal Bank, and Halifax have Knocked me back already

 

Colin

[dcefx]

It's been covered elswhere but basically you're only going to get offered the most basic business banking facilities (you can forget being able to take credit cards etc). The best people - relatively speaking - for poor status "trading as" business accounts are Nationwide Building Society & Lloyds TSB.

 

It's worth hasseling whoever you have your personal account(s) with and explaining to them that you need a basic named account - they do have the authority to over-ride credit scores if you can get them on your side.

[ColinJWatson]

Thanks for that, I did have a wee search but couldnt find anything.

 

My own bank are being pretty rubish about it, I had told them all I wanted was an account to put cash into, the most basic, and they said no. I even asked about opening a normal account, and using that to put my takings into, they told me this was illegal.

 

I will write my own bank a letter, and see what I can do, in the meantime I will see about joining nationwide/lloyds

[visagephoto]

I don't see how it can be illegal to open a normal bank account & process your income (takings) through it, especially if any cheques etc. were made out to you personally. I would assume that this woud be perfectly legal, as long as you keep proper records for the, IR etc, The bank would lose out on income from charges for business transactions though.

[ColinJWatson]

Thats true actually, because if its perfectly legal for me to put cheques made out in my own name through my own personal account, then why can I not do it this way.

 

I think I will open a new basic account for this purpose actually.

[alanfromderby]

Have you tried NatWest, they say they offer business bank accounts that don't require credit checks.

[ColinJWatson]

Would I be better to go into branch or to do it via the Internet?

[alanfromderby]

Depends if you have any special requirements, but the online system seems to work very well. I signed up for a personal account, and everything was up and running within about 10 days.

[ColinJWatson]

Thats me applied via the net, asking for no extra's So just wait and see what they say now

[ColinJWatson]

apparently my credit rating is too poor, which is a shame, as its just holding me up now.

 

Would writing to exuifax help? trying to get some of these searches removed from my file? Can this be done?

 

Colin

[colour-me-happy]

apparently my credit rating is too poor, which is a shame, as its just holding me up now.

 

Would writing to exuifax help? trying to get some of these searches removed from my file? Can this be done?

 

Colin

 

A friend of mine has just opened a Business Investor Account with the Nationwide and his credit is appauling

 

All he needed was a letterhead for the business, his VAT registration number (he registered with them soley for this purpose, you don't need a certain level of turnover and it's really easy to do - online too) proof of id obviously and they opened it no problem.

 

You do need to open it with £5000 though.

 

It has a cheque book too.

 

Hope that helps.

[ColinJWatson]

yeah that was my problem, I was willing to put money in to fund the account, and I would go VAT registered for this purpose, because I am hoping to open a shop, but I wouldnt be able to do it without going VAT reg'd. Wouldnt be cost effective.

 

But yeah I will look into Nationwide, and see what they say, thanks for that

 

Colin

[vix2000]

I work for an accountant and a lot of my retail clients use girobank, as their charges for paying in cash and cheques are much less than other banks.

[MARTIN3030]

Colin I am in the same position as you and currently working from home.

I formerly had a shop and now need the space at home back so am looking again.

When Barclays closed my Business account I continued to trade using my current account this works fine but you may have problems with invoicing /billing where the customer needs the company name (on the invoice to be matching the name they are paying the cheque to)

I had several problems with this for example a school who had to requesite the invoice to the cheque name.

 

Other problems were my debit/credit card terminal the direct debits for payments and also transactions have to go through business accounts.

 

Thirdly I had a problem with the accountant who told me in the short term it was ok but for Vat and tax purposes it had to be strictly a stop gap before finding another business account.

 

I was told that it was actually illegal to use an account for business if it was set up for daily personal use and being used for both.

I was also told that the bank was entitled to be informed/should be.

 

I do know there are lots of off shore banks advertising on the net offering quick and simple Business accounts with no restrictions to applicants.

But of course its worth checking out the advice you have had here.

 

In the meantime I too will let you know how I get on with mine.........this info will be great for all those who are being held up against setting up because of this main requirement.

 

[Snorkerz]

I even asked about opening a normal account, and using that to put my takings into, they told me this was illegal.

 

IIRC the Personal bank accounts specify in the small print that they can't be used for business. This not only prevents you avoiding Business Banking charges but also ensures that businesses do not get protection of the Consumer Credit Act.

 

So far as being 'Illegal' well, only in terms of contract law because you would be breaching the contract.

[andrew1]

Try a couple of things. First sign up as a meneber of the Federation of Small Business http://www.fsb.co.uk it will cost you about £75 a year and you get all sorts of legal assistance and cover for Inalnd Revenue and VAT investigations included. Also as a member you get 18 months free banking with the Co-op bank http://www.co-operativebank.co.uk. Transactions cost you zilch you only pay for OD and the usual unlawful penalties ( which with this sites help you can get back!!) They are not a bad bank and you might find as a FSB member it will help. It's- (the FSB) worth every penny in support believe me. 24 hr legal assistance for you and your family.

[meeps]

I have banked with RBS for almost 20 yrs.

I asked for a small working overdraft for my new business of up to £1000 and although my money had gone into start up costs, the business was moving forward. The business way as brokerage service and cheques from the larger companies are always slightly longer than the 30 days however I was also paying out to suppliers. I was dealing with financially sound companies however the bank refused an overdraft and loans. The business manager was non existent and offered no start up support before he moved departments. What make me angry is not being offered a working overdraft of £1000 when the business turnover was £85,000 first year and profitable. There was no real risk it was important to manage and build up a reputation. However sometimes money in was not cleared prior to payments and therefore I ended up with bank charges from transactions. I totalled £1739 of bank charges in 3 years purely on transaction overlaps which I have been trying to get the bank to refund which it has clearly rejected. I am particularly angry with the refusal of a working overdraft of £1000 and yet the bank will charge me £660 in banking charges with declining cheques in my first year. this obviously did not help my reputation and word soon spread. Yes much is my own fault but there is no give or support with the Bank. I gained a poor personal credit 5 years before when I was off work for 9 months and charges accumulated which I then took a loan plus insurance out to pay charges. I was very ill and suffered major panic attacks during this time but was the only negative period with the bank. I can see no other reason and yet they want to conduct a credit search even for a £500 overdraft. Why are bank so difficult especially small businesses. I decided to change direction after detailed market research and will re brand and use the internet to leverage the business model with a greater focus on environmental resource efficiencies and wish to choose a bank with similar green credentials.

If anyone has any advice with difficult bank on how to get these charges refunded and to start with a bank with a green focus please respond, many thanks.

[andrew1]

My god, doesn't that all sound far too familiar. My commiserations. If you had asked for 20,000 or 50 you would have probably got it, but £1000 - not a chance.

 

I've banked with a number of banks over the years and they are all much of a muchness. Now I am with Co-op bank, use it online, have no processing charges as I am a member of the Federation of Small Business which costs all of £70 a year and you have a 24/7 legal help line thrown in. It's worth its' weight in gold. Join if you haven't already.

 

As for bank charges for your company, I have retreived £900 from co-op without fuss when I just tipped over the nil balance because life was inactive for a while and an annual D/D went through clocking £10 a day in unauthorised O/D fees and I never checked the account. Quoted this forum and gave a bit of officialdom to them and they refunded.

 

I have just retreived £750 worth ( in promises ) from Lloyds for a friend and

I told them I'll sue them for the rest if they don't refund them bringing that up to £1300 - all these are Ltd Cos and there's really not much difference from claiming your personal ones. Just follow the step-by-step guide and the forum rules and you'll get them all back.

 

Once you have been around the forum a while, it's easy to talk directly to the banks on a business front, they are inundated with claims so you are not talking about anything new to them and if you get through to the right people and add a bit of humour to it I find I have few troubles.

 

The template letters need to be checked as there are some letters for personal and some for business accounts as the laws are slightly different.

 

Go for it.. & good luck.

[meeps]

Thanks for the quick reply. Perhaps we should set up a consumer group bank, no over drafts and no only a very small running cost charge. Every process involves a cost, so the more processes the more charges the banks can apply. RBS should reduce advertising and sponsorships at major events and focus expenditure of reducing their customers costs.

 

Where can I find the consumer and the business letters so I can claim for both account refunds.

 

The charge in my personal account amounted to the region of £2500 when I was very ill back in 1998. The loan was to refinance my overdraft however I would only be granted the loan in condition with the banks insurance and at the certain borrowing interest rate.

All I have done since 1998 is pay bank charges and pay interest and loans, twice refinance loans of £5000 to clear the overdraft of charges and interest, and pay interest on the loan from on the charges and interest, pay insurance on top all stemming from the initial bank charges . I have been for bank charges on top of interest on interest and insurance to the bank over 3 times the amount from their own charges. I has been like a carousel of debt payments. Can I go that far back even if my loan finished at the end of 2005 which include all the top up refinancing. What a mess but I was so vulnerable and unaware back then.

[andrew1]

Meeps, I don't have time just now to address all these thing right now but you appear to be new to the forum and we welcome you with opened arms, but I have to direct you to the Frequently asked questions at the front of the forum and suggest reading up on of few of these issues on other peoples threads. I'd recommend a good week or two even scrolling through to get a flavour of what to do. Start your own threads for each item and then a moderator ( those guys and gals with green name tags rather than our blue ones) will keep an eye on your postings and guide you through. Study them first and your questions become easier to ask. good luck

[Guest Zooman]

Join the FSB and use their banking accounts with the co-op bank and they also can help setting up streamline (PDQ) at much better rates then you would ever get on your own. Plus loads of other stuff.

[andrew1]

Join the FSB and use their banking accounts with the co-op bank and they also can help setting up streamline (PDQ) at much better rates then you would ever get on your own. Plus loads of other stuff.

 

Hi Zooman, I am with Co-op, but what's streamline? PDQ I take it means pretty damn quick eh?

[tim2718281]

Wondering if anyone has came accross this problem before.

 

I run my own business, and I have been declined for 2 business bank accounts due to having a poor credit rating from a few years back.

 

However, now I am looking to open my own shop, but still do not have a bank account. I mean its not like I want money from them, all I want to do is have somewhere to put my money into, so its safe and secure.

 

Anyone got any advice on what I should do next?

 

 

 

Many, many, years ago, I worked for a building society, and it was quite common for traders to have savings accounts. Perhaps one of those would meet your needs.

 

(You won't be able to have a cheque book ... if you really need a cheque, the building society can write one for you, for which they will charge a fee. On the other hand, lots of people will accept a building society cheque.)

 

Tim

[Guest Zooman]

Co-operative Bank - FSB Business Banking

 

Streamline - New to Streamline? - Streamline Merchant Account (FSB savings cicra 50% plus no sign up fees)

 

Federation of Small Businesses (FSB) - Britain's Largest Business Support Organisation

 

Federation of Small Businesses (FSB) - FSBBenefits

[ColinJWatson]

This topic was closed on 03/08/19.

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