With the first two years often being ‘make or break’ for business start-ups, ensuring you have ready access to cash flow, low transactional fees and the support of your business banking provider is critical. So what should you focus on?
One of the most important financial decisions for a business start-up.
As a business start-up, choosing the right business current account is a decision not to be taken lightly. Getting the provider or business banking account wrong risks not just paying a small fortune in unnecessary charges, it could also mean denying yourself access to funds when you need them most.
So what should you look for in a new business banking provider? And who can you trust for independent guidance on accounts, when everyone’s hungry for your business?
Why not go to your personal account provider for your business banking needs too?
You could, of course. But just because your business banking provider is good at personal accounts it doesn’t mean it has a strong business account offering. And with hundreds of business banking accounts to choose from, you’ll be closing your eyes to business-only specialists, accounts designed specifically for start-ups – and a host of free banking offers and free business support.
When it comes to business banking providers, big is certainly not always best. Almost 20,000 small and medium sized businesses were interviewed by independent financial services website Business Banking Insight and the research revealed that smaller providers such as Handelsbanken, Danske and Yorkshire Bank enjoy some of the highest level of recommendations from companies with 0-9 employees.*
There’s a business bank account out there tailored to your needs – you just need to define them first.
Business 101, perhaps, but deciding on your needs within the three areas below will help rule business banking providers in or out – and ensure your growth isn’t hampered by charges, restrictions and a frustrating service experience.
- Local or virtual? Do you need a business banking branch near you to make business deposits – or are you happy with an online-only or telephone business banking service?
- Specific needs. Will you need foreign currency to pay suppliers regularly? Does your SME business attract large volumes of cash and cheques – and need to make lots of small payments? Some business banks charge item fees for each. How big an overdraft might you need to support your cash flow? Is interest on unused balances significant for you?
- Business banking advice and support. Will you need the support of a small business adviser in your early years? Many business banking accounts offer this – so it’s worth considering if it’s available.
Use independent sources to inform your choice of business bank account.
While many business banks have attractively designed websites and brochures that make their business accounts look appealing, it’s best to get guidance on accounts from SMEs as close as possible to your business situation.
* Business Banking Insight data, Q4 2016. Minimum base size of 30 respondents