Opening a Business Bank Account

How Do I Open a Business Bank Account?

Keeping your business finances separate from your personal bank account is a good choice when launching your own small business and is often time even a legal requirement. The application process varies, but usually involves either going in-branch or registering online with some additional paperwork to submit depending on which type of provider you choose.

Read on to learn about how to open a business bank account as well as other essential information that can help you avoid delays and get approved as soon as possible.

1. Choose an account

The first thing you will need to do is choose a banking provider that you want to open your account with. This is an important step, as different providers such as high street or online banks will have different offerings on account fees, features and support options.

2. Get your documents ready

Once you have picked an account, you will need to get all the appropriate documentation ready, which, if you decide to go with a challenger bank, you can upload via their mobile app. This usually results in a much faster application approval with some accounts being verified in as little as 15 minutes.

3. Apply in-branch or online

Next, you can either open your account in person or online. Most challenger banks only operate online and do not have a physical branch you can walk into which means most of your application will be online or through an app. High street banks also offer online applications, but give you the option to walk in-branch and speak with an advisor.

4. Wait for approval

The last step is for all your documents to be verified. This process can vary depending on your application and choice of provider. Once complete, you'll receive a business debit card and you can start using your new business account straight away.

What do I need to open a business bank account?

The main documentation you will need to open a business account include:

• Proof of ID - this can be any photographic identification, e.g., a driver’s licence, passport, or ID card. All company directors must provide proof of identification.
• Proof of business address - this can be in form of utility bills, bank statements, or council tax statements. The bank will require originals that you have received via post and not copies that have been printed off.
• Contact details - this usually means phone numbers and an email address
• Turnover - this is your company’s projected annual turnover
• Registration number - your registered number with the Companies House

Many traditional banks will ask to meet at least one of your company’s representatives and will want to know if you have any overseas shareholders and company directors. There are usually different requirements depending on whether you're set up as a sole trader or limited company.

Some banks may also ask for documents that demonstrate a clean credit and banking history. However, even with a bad credit history, you can be accepted for a more basic business bank account without having to go through a credit check.

Turnover can indicate how your company is performing and what financial products are suitable for your business. If you are unsure of how to estimate your company’s turnover, try to calculate your fixed costs (salaries, inventory, office space, etc) and then figure out how much money you will need to break even. Remember that turnover is your gross revenue and profit your earning.

If you don’t know where to find your Companies House registration number, you can search the details of your company on their online register. You should also be able to find it on any documents from when you first set up your company or any letters you have received from Companies House.

You should always carefully read the eligibility criteria, as well as the terms and conditions before making your application to avoid unnecessary delays.

How long does it take to open a business bank account?

This can vary between different banks and the nature of your business, but on average the process takes from a week to three months to fully complete your application.

With challenger banks, it’s not uncommon to have your application processed and approved the same day with the rise of automated processing of applications.

In either case, you can be delayed further if any of the information or documentation provided is incomplete or incorrect. Be sure to factor in this time into your business plans, in case your application takes longer than expected.

Can I switch business bank accounts?

Switching accounts, be it your personal account or your business account, is usually an easy process, if there is no fixed-term policy on your account, and you have paid off any debit balances.

You should be able to make the switch without having to pay a fee, depending on the banks. However, we encourage you to check the terms & conditions that apply and to contact your current banking provider for clarification if you have questions.

Can I open a UK business bank account as a non-resident?

It is not compulsory to be a UK resident to open a business bank account, but it’s a good idea to double-check any eligibility criteria and requirements set out on your preferred bank's website or by contacting them directly.

The UK’s largest banks including Lloyds, Barclays, and HSBC usually have more experience with non-resident applicants and often will provide accounts suitable for international use. Although these accounts typically carry more fees and commitments, such as account fees, minimum monthly transactions, and initial deposits.

Online challenger banks, and e-money account providers are growing in popularity as less expensive alternatives to traditional high street international accounts.

Can I open a business bank account online and is it quicker?

Opening a business bank account online is fast becoming the hallmark of challenger banks, as it allows new customers and small businesses to get set up faster than ever before.

It is important to note, however, that this depends on the bank, the application, and if you are comfortable with a fully digital experience. Some business owners prefer support from local banking services as their application progresses and their business grows.

What do I need to open a business bank account online?

For many digital banks, you will need a compatible device to download their mobile app. Although many of these banks also offer applications through their website. Whilst online banking is faster and in many cases more convenient than going into your local branch, it does require all of the same paperwork to be uploaded.

If you have specific requirements or need to check the eligibility criteria, it’s always best to check their website or contact the bank directly before submitting your application to avoid delays.