UK Business Bank Accounts with Bad Credit
UK banks will generally reject an application to open a standard business current account if the applicant has a history of bad credit. Even if the business is a limited company (which is a separate legal entity to the individual(s) running it) banks will still credit check the owners/directors. Some banks can be more lenient than others with regards to different types of bad credit (bankruptcy, CCJs are the worst) but on the whole the bank will refuse to open an account.
All is not lost, though for those in this situation. There are options available and we have listed some of them below.
You will be required to provide 2 forms of ID (identity and address) plus proof of your business to open these business bank accounts.
Business Prepaid MasterCard account from MyCashPlus (click to visit)
The Cashplus prepaid MasterCard is probably best known for being the first and most popular consumer prepaid debit card in the UK with more than 1 million cards having been issued. What is probably not as well known is that a Cashplus prepaid Gold MasterCard is also available for businesses (sole traders, partnerships, limited companies) (and charities) with the business name printed on the card. No credit checks are carried out and the account is guaranteed provided suitable personal ID and proof of the business can be presented.
The only real downside is that it is not possible to deposit cheques into the account.
Several variations of the business account are available each one coming with a different charging structure.
The account comes with similar facilities to the personal Cashplus prepaid account .
What Cashplus Business offers:
- Gold Business prepaid MasterCard debit card. Withdraw cash and pay for goods and services with the card at home and abroad. No credit checks. Guaranteed acceptance (subject to identity and residency checks). Ideal for undischarged bankrupts or those in an IVA (Trust Deed). Standing Orders and Direct Debits. Deposit cash for free at any UK Post Office or at any of the 1600 Cashplus stores. Inward electronic payments ( BACS. Faster Payments, standing orders) allowed. Outward electronic payments (Direct Debits and bank transfers) allowed. Online banking.
- Cannot deposit cheques. No cheque book provided. Fees and charges apply. Annual fee ?49. Bounced Direct Debit fee ?10 (max ?40 per month).
CardOne Business Banking (click to visit)
CardOne Banking are well known for providing guaranteed personal bank accounts but have now introduced a guaranteed business account. This a managed UK business current account complete with corporate prepaid MasterCard debit card.
With this managed (rather than basic) account, all funds are paid into what they call the ‘Jam-Jar’ business account. Bills are paid and Standing Orders are set up from this Jam Jar account. Then remaining funds can be moved to the ‘spends’ Jam Jar which is the card. This process can be automated.
What CardOne Business Banking offers:
- Corporate prepaid MasterCard debit card. Withdraw cash at ATM machines worldwide and pay for goods and services online or by phone. Max. card balance ?5K. Guaranteed acceptance (subject to identity and residency checks). No credit checks. Ideal for undischarged bankrupts or those in an IVA (Trust Deed). Available to sole traders, partnerships or limited companies with a turnover of no more than ?2 million per year. Deposit cash and cheques for free at any branch of Barclays . Deposit cash for free at any UK Post Office. Inward electronic payments ( BACS. Faster Payments, standing orders) allowed. Outward electronic payments (bank transfers) allowed. Online and automated telephone banking. Account manager provided.
- ?55 application fee (refundable should you be refused an account for any reason). Minimum ?12.50 monthly charge. No Direct Debits at present but available in coming months. No cheque book provided. Some charges do apply.
Metro Bank Business Instant Access Deposit Account (click to visit)
For those living in the Greater London area this basic business deposit account from the relatively new Metro Bank UK may be suitable. A branch (or store as they call them) visit is required to apply.
What Metro Bank offers:
- Basic business deposit account. No minimum opening deposit or operating balance required. Deposit funds (cash/cheques) in store. Withdraw cash in store. Instant access. No notice required for withdrawals. Manage account online or by phone. Receive electronic payments ( BACS. CHAPS, standing orders). No charges or fees. No Metro Bank business current account required.
Monthly statements by post or online.
Stores (branches) in Greater London area only. No card or cheque book. No Direct Debits or overdraft.
UK Business Bank Account with Visa Debit Card and Cheque Book For ThoseWith Bad Credit
This business account was introduced in 2008 and is the only business account from any UK high street banking institution that is specifically aimed at those who have an adverse credit history. It also targets new businesses and offers them 2 years of free banking.
a CREDIT ONLY account but does come with a Visa debit card and cheque book. It can be managed in branch, by phone and perhaps more importantly online. This allows the account to be operated electronically (receive payments and set up Directs Debits/Standing Orders etc).
This business account can be applied for by phone or at a local branch by filling in an application form.
What this adverse credit UK business account offers:
- Visa debit card. Cheque book. Paying-in book provided. Direct Debits and Standing Orders. 2 years free banking for startups (if you have been in business for less than one year). Telephone and online banking. Ideal if you have CCJs (County Court Judgments), defaults, a poor repayment history or are discharged from bankruptcy. Available to UK limited companies, sole traders or partnerships. Account is a specialist business account of a major UK high street bank. Specifically targeted at those with very little or an adverse credit history. The ONLY full UK business bank account on the market (from a mainstream UK bank) that advertises the fact that it is for those with a bad credit history. Most adverse credit accepted. No application fees.
- No overdraft facility (CREDIT ONLY ). No undischarged bankrupts or IVAs .
To get details (information ONLY) of this account for only ?29.95 click on the Order Now button below.
Important. When ordering, please enter a correct postal address for verification purposes. Details of the page where the UK business bank account details and all updates can be found will then be emailed to you.
You will receive your order by email once it has been verified.
Make sure you have given a working email address and checked your junk/spam folder just in case it has been directed there.
Information correct as of 21st September 2014
Other Possible Solutions
Barclays have a reputation for being a bit more accommodating if the credit history is not too bad and just limited facilities without an overdraft are required. In this situation it is best to make an appointment at a main branch and tell them that just the most basic of business accounts is required. Explain the situation honestly and provide a good business plan.
Lloyds TSB could be approached in much the same way. Once again make an appointment at a main branch not a minor one and tell them that only the most basic of business accounts is required. Do not apply via their website.
Some UK building societies also provide accounts to businesses and organisations (sole traders, partnerships, limited companies, charities, clubs and associations etc) usually in the form of a basic savings or deposit account that can be managed in branch using a passbook or by post. There doesn’t appear to be any basic passbook business accounts from high street banking institutions any longer.
Do a search for non-personal accounts and it may be possible to find a few business accounts from building societies. Some of the accounts are easier to open than others. Some of these building society accounts are strict savings accounts that require the applicant to already possess a normal business account and will only accept initial opening funds by cheque from an existing business account. Some appear to be a bit more lenient although exact opening procedures for many of them appear to be a little vague. Enquiries would need to be carried out beforehand regarding opening requirements/procedures and what type of activity would be acceptable with these accounts.
Building societies which provide passbook/branch or postal business accounts include:
Bath Building Society which offers a business account called the Business Direct Account. It requires an opening deposit of at least ?2500 and an operating balance thereafter of at least ?1.
The Cambridge Building Society which offers a savings account called The Cambridge Easy Access Business Saver which is available to businesses (sole traders, partnerships and ltd companies), charities and clubs and associations. A minimum investment of ?1000 is required. One cheque and up to ?1000 in cash per day can be paid in. Two withdrawals maximum per calendar month are allowed without loss of interest. Access is by branch, post and funds can be deposited over the phone using a debit card.
Other business accounts from The Loughborough Building Society and Monmouthshire Building Society are available but applicants must live within certain postcodes which are generally close to the local branch network.
Of course, if an individual decides to operate their business as a sole trader then it can be run under the name of the owner. There’s no law stating that the self-employed must use a business account – it’s just that the banks prefer it so that they can charge for an account. As such, it may be possible to get away with using a personal bank account for this purpose. However, if the bank finds out (for example, by noticing that a lot of transactions are going through the account) then they may put a stop to this (or start to charge fees by possibly opening a business account).
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