Do you want to open a new bank account for your business but you’re concerned that a bad credit score might mean that you’re not able to?
In years gone by, you would have genuinely struggled to find a bank willing to work with you. Slowly but surely, things are beginning to change. There are now emerging the first positive signs of real competition to provide clients with bad credit business bank accounts.
That’s significant news for the entrepreneurs, freelancers, contractors, and the self-employed who have had financial problems in the past searching for a flexible and suitable business bank account.
No credit check bank accounts are also now starting to appear as well however what you can do with them is quite limited at this time, unfortunately. While they do allow you to do a lot more than just make and receive payments, the standard additional banking services like loans, overdrafts, and invoice finance are not yet being widely offered by these new-start banks. This may crimp the chances of future growth for firms.
In this article, we examine a selection of the current offers being made by financial services providers competing for your custom.
Bad credit business bank account comparison
There are currently 10 banks offering bad credit bank accounts and no credit check bank accounts.
|Bank name||Cost per transaction||Monthly fee?||Free introductory period?|
|Anna Bank||Free||Free to £24.90 a month||3 Months FREE|
|Tide bad credit business bank account||Free||Free||One Year FREE Transfers.|
|Acorn bad credit business bank account||From 30p||£12.50||No|
|Arro bad credit limited company business bank account||50p||From £5pm||None|
|Arro bad credit sole trader business bank account||First 10 pm free then 50p||From £10pm||None|
|Bunq bad credit business bank account||10 Eurocents||£9.99 – £19.99||No|
|Card One Banking bad credit business bank account||30p||£12.50||7 months free with small business account|
|Cashplus bad credit business bank account||Free||Equivalent to £5.75 a month||No|
|iCount bad credit business bank account||Free||£9.95||No|
|Monese bad credit business bank account||Free||£9.95||No|
Bad credit business accounts – in depth
Tide bad credit business bank account
Tide’s mixture of a bad credit bank account and an online bookkeeping and accounting app are aimed at the UK’s freelancers, contractors, small businesses, and businesses scaling up. Over 100,000 British business owners now use Tide.
Although they have no branches of their own, Tide customers can visit either a Post Office counter or a PayPoint retailer to pay cash into their account.
Tide charge no monthly account maintenance fees or for using your card. They do however charge for cash deposits, cash withdrawals, and for transactions to and from non-Tide accounts.
Up to £150,000 in funding is available subject to status through Tide’s partnership with Iwoca. Applications for finance can be made online or via the Tide app.
We have a special partnership with Tide. You can get 1 year or FREE transfers. There is no fee to withdraw cash with your Debit card either.
Acorn bad credit business bank account
A new entrant into the UK business bank account market, Acorn advertises itself as providing “a new type of business money management” service.
When you apply for an account, you do so online and Acorn does not credit check you or your company – ever.
The service is £12.50 a month and there is no application fee to open an account.
With the Acorn service, you benefit from:
- your own account manager
- cash withdrawals of up to £450 a day from ATMS
- SWIFT & IBAN numbers if you do business overseas
- 24/7 access – view balances, pay bills, check transaction history and print statements online whenever you want
- over 10,000 places to pay in cash and cheques at branches of the Post Office or Barclays Bank
- a prepaid Corporate MasterCard
- automated SMS and telephone banking.
More on the Acorn bad credit business bank account.
Amaiz bad credit business bank account
Amaiz offer two different plans to customers – both with no credit checking.
Their Starter service is free and their Advanced service is £9.99 a month. For the £9.99, you get access to a team of accountants, a self assessment tool, and a MTD-compliant VAT suite.
Other service features include:
- free cash withdrawals
- free cash payments in at Post Officer counters
- synchronisation with online bookkeeping and accounting packages including the popular FreeAgent
- control your inclusive prepaid MasterCard from the app (order a new one, freeze or unfreeze your current cards)
- separate jar accounts to save for tax or any reason you decide
- around the clock support (including on bank holidays)
More on the Amaiz bad credit business bank account.
Arro bad credit limited company business bank account
Arro offers brand new business bank accounts within 3 minutes of applying with no credit checks and guaranteed approval.
Arro is completely online and a few of its more important advantages to customers are:
- up to 10 ATM withdrawals, Faster Payments, and online transfers a month each for free – 50p thereafter
- pre-paid Arro Mastercard you can use in the shops and online
- set up direct debits, make payments, and move money on their online dashboard
- standard account number and sort code
The Limited Company account costs from £5.00 to £15.00 per month and there’s no account opening fee and all credits into your account are free. It costs 50p for ATM withdrawals, Faster Payments, and online transfers.
Arro bad credit sole trader business bank account
In addition to offering accounts for limited companies, Arro also offers accounts to sole traders.
The service is identical to the limited company account but the charging structure is different. The monthly fee is £10.00-£15.00 a month for sole traders however users benefit from up to 10 ATM withdrawals, Faster Payments, and online transfers a month each for free – 50p thereafter.
More on the Arro bad credit sole trader business bank account.
Bunq bad credit business bank account
Costing €9.99 a month and delivered through a sophisticated and user-friendly app, Netherlands-based Bunq is the only bad credit bank account available which pays interest on balances – up to 9 times the rate of “a traditional bank”, according to their website. You shouldn’t get too excited though because the actual rate is 0.27% per annum.
There is currently no agreements in place with the Post Office, PayPoint, or other banks to allow customers to pay cash or cheques they receive into their Bunq account.
The app the platform uses is very sophisticated with receipt scanning, the ability to set aside VAT on payments made to and from your account, and a notification system alerting you to any card payments, direct debits, or inbound transactions.
More on the Bunq bad credit business bank account.
cardonebanking bad credit business bank account
Available for companies which turn over £2m or less every year, cardonebanking is a web-based bank account offering standard basic banking services to its clients.
You can order up to 4 prepaid Corporate MasterCards linked to your account for you and your employees to use. Business owners can remotely administer each card to help manage outgoing expenditure better.
They have a UK-based call centre and you can access your account online, by phone, or via SMS 24/7. Their online banking platform is also compatible of synching with popular bookkeeping packages.
More on the Card One Banking bad credit business bank account.
Cashplus bad credit business bank account
Cashplus was awarded with the UK title of “Top Challenger Bank” in 2017. Judges were particularly impressed by:
- the company’s expenses card system,
- no monthly subscription fees,
- Faster Payment Scheme membership, and
- its compatibility with popular accounting and bookkeeping software platforms
The service costs £69 a year and, unusually for bad credit bank accounts, there is the option to apply for an iDraft (their version of an overdraft) or up to £300,000 in funding based upon how much you turn over each month on credit and debit card transactions.
Joining takes 5-10 minutes, you’re automatically issued with a Business MasterCard, and you can make cash and cheque payments in at Post Office counters.
More on the Cashplus bad credit business bank account.
iCount bad credit business bank account
iCount offers customers looking to improve their credit rating with a basic business account service costing £69 a year. No credit check is performed but the bank will need to be able to verify your identification prior to opening your account.
There is no monthly fee for their service and no charge for receiving payments from clients. Your first three payments out are free with any subsequent payments cost 99p.
iCount have come to an agreement with the Post Office allowing their customers to deposit cash at their counters.
The account comes with a MasterCard debit card, free online banking, and access to a UK call centre offering what the bank describes as “top quality customer service”.
More on the iCount bad credit business bank account.
Monese bad credit business bank account
With no credit checks and no proof of address required, monese is one of the very newest competitors in the bad credit business bank account market.
The service costs £9.95 a month – for that you get both a business account and a personal account. Local payments (UK and EU are free) and they offer competitive rates on international payments and cross-border transfers. You can choose to operate both your business and personal accounts in sterling or in Euros.
Customers can deposit cash at Post Office counters or at PayPoint retailers and each new client receives a contactless business card.
More on the Monese bad credit business bank account.
Bad credit business bank account FAQ
Do I really need a business bank account?
Yes – you shouldn’t run your business using a personal bank account. From a bookkeeping point of view, it’s very difficult for your accountant to be able to separate personal and business transactions – s/he’ll take more time working out what tax you owe and their calculation may be prone to greater error.
Also, many potential customers and suppliers will be put off making payments to or receiving payments from a personal account. It will look unprofessional and not inspire confidence that you’re going to be around for very long.
Should a sole trader get a business bank account?
Yes. A sole trader should get a business bank account for the same reasons given above.
The additional services offered with these bad credit business bank accounts seem sparse – why?
There aren’t many “extra” services with a bad credit business bank account because many standard bank services are debt-related – for example, overdrafts, business loans, invoice finance, and so on.
Many mainstream and high street banks are reluctant to do business with someone who has a bad credit rating. Many of the services listed here have been set up to handle incoming and outgoing transactions and little else. They don’t offer debt-related services and, because of that, they won’t lose any money on them.
Tide and Cashplus do offer debt-related services – check out their offer to see if it’s suitable and applicable to your business.
Do mainstream banks credit check me as well as my company?
Yes – high street and mainstream banks nearly always credit check both the owners of a company as well as the company itself when considering an application to open a new account.
How can I improve my personal credit score?
Improving your personal credit score does not happen overnight however the best ways to do it are:
- register on the voters’ roll
- keep your credit card and overdraft balances to a minimum
- don’t apply for new credit accounts too often
Bad credit business bank account – in conclusion
A no credit check business bank account is a relatively new development – and it’s certainly one that should be welcomed.
Why? Entrepreneurs and people who start their own businesses take financial risks that those on a wage packet don’t appreciate. Until you’ve done it yourself, you never quite know just how close to the line self-employment takes you financially sometimes.
And, despite their best efforts, sometimes these ventures end in failure which has a knock-on detrimental effect on people’s credit score.
Things are changing though now. There is now a limited choice of business bank accounts.
Bad credit applicants have benefited from a general opening up of both the financial and banking worlds in recent years. There is now competition for the custom of clients who, 20 years ago, would have struggled to even book an appointment with their local business bank manager.
Currently, the options available on the market certainly won’t provide you with all of the extra features you’d expect from a standard, full business account. With bad credit banking options continuing to expand, you might not have to wait a great deal longer to get the support you need from a bank to turn your business into the biggest, best, and most profitable version of itself possible.