What happens if you’re not happy with your current business bank account provider? Here we look at why you might want to switch, and how the switching process works in reality.
Business banking basics
A business bank account works in a similar way to a personal current account but is designed to manage your business finances.
You can use a business bank account for all your usual banking needs such as sending and receiving payments, as well as applying for credit or loans.
Most banks, including both high street and challenger, offer business bank accounts, and even some larger building societies, such as Nationwide.
Any registered business can apply for a business bank account, as long as you meet the eligibility criteria. The criteria will vary depending on the provider, so it’s important to check this when looking for a new account.
Luckily, with a wide range of providers and products, most businesses should have little to no issue finding a suitable account.
If you’ve had no issues with your current provider, you might not have considered switching accounts before. However, our recent research found that 51% of UK SMEs are planning to switch their business bank accounts in 2023. Switching providers can be beneficial for your business and its finances. It’s also a more simple process than you might think.
Why would you switch your business bank account?
Each provider offers different features, benefits and services, and not all will be suited to your business’s financial needs.
Some business bank accounts charge fees that you don’t usually have with a personal current account.
Providers might charge a monthly or annual fee for opening the account and fees for services, such as transactions, deposits, and withdrawals.
The fees will vary depending on the provider, and some banks don’t charge you for these.
You might choose to switch for ease of access. Some providers have a better online or mobile banking system, which is ideal for on-the-go banking.
If you prefer banking in person, you might switch to a provider with more branches around your local area.
You might want access to an advisor, or to investment services, which aren’t available with every provider.
Some banks will also offer incentives for new customers switching to their accounts, such as cashback or a larger allowed overdraft.
Choosing the right bank account
Ultimately, you want your bank account to complement your business and the way you manage your finances.
You might be tempted to find an account that doesn’t charge fees. However, it’s often worth paying for the additional benefits the account offers in return.
If you can find an account without fees that also offer the features you need, then that’s great. But, most business account fees are not overly expensive, so don’t compromise on benefits simply to save a few pounds.
Switching perks such as cashback offers can be tempting and are worth investigating.
However, keep the core banking features and benefits in mind. They are important in the long run.
Finding a suitable bank account is only one part of the selection process. It’s worth checking customer reviews so that you can be confident that the provider has a good reputation.
When dealing with business finances, it’s important to check that the company has a proven customer service track record. If you have any problems with your account it’s good to know they will be dealt with professionally and efficiently.
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The switching process
Once you’ve found the best account for your needs, you can get ready to switch.
Now is the ideal time to review any payments on your existing account, removing any that are no longer needed. This stops these unnecessary payments from being moved to your new account.
You should also keep any bank statements from your existing account for future reference, as these will not be transferred over.
It’s available for businesses with under 50 employees and an annual turnover of less than £6.5 million.
To get started, first you need to open your new account.
Your new provider may require a variety of verification documents.
This could be forms of identification, your business registration number and an HMRC certificate.
They’ll let you know as part of the application process.
Once the new account is open, you can choose the day the switch should occur. You can select any day that works best for you, except weekends and bank holidays.
When choosing a date, allow at least seven working days for the switch to process. Let your new bank or building society know when you’re ready to start the process.
They will handle everything from here, moving over all funds as well as incoming and outgoing payments from your previous account. Any payments sent to your old account will be automatically redirected to your new account.
This means that the switch will not affect your regular payments.
On your chosen switch date, your previous account will close and the new one will be ready. If you have any problems after this date, you’ll be covered by the Current Account Switch Guarantee.
This means that your new provider will refund any interest lost or charges made to your account that have resulted from the switch.
It’s really that simple!
Some final thoughts
From here, you’re ready to enjoy the benefits of your new business bank account.
If you read customer reviews before selecting your new provider, consider leaving a review yourself.
Navigating the world of financial services can be difficult, and business decisions should not be taken lightly.
Writing an honest review of your experience can help other business owners make an informed decision when choosing their next provider.
Jacqueline Dewey is CEO ofSmart Money People, the UK’s dedicated financial services review site.
