Business bank accounts: a challenging landscape

8 October 2020: ICAEW’s Philippa Kelly provides a practical assessment of the current challenges around opening a business bank account.

While banks are experiencing unprecedented demand for opening business accounts, businesses are facing delays, refusals and even offers of cash to take existing accounts elsewhere. This is alongside banks assessing their offerings for those not resident in the UK as the Brexit deadlines loom.

Small businesses that may have operated without a business bank account to date or are seeking an account with a new bank in order to access CBILS or BBLS are concerned that delays in account opening mean they are without an account as the deadline for accessing the schemes lapses on 30 November.

On the side of the banks, managing demand in a remote working world presents operational challenges, and the need to complete compliance processes and checks remains of the utmost importance.

In order to help move things along as quickly and smoothly as possible, businesses seeking to open an account for the first time should consider their options and understand who is currently accepting new applicants.

It may be possible to look beyond high street providers. However, it is important to be aware of the difference between business bank accounts and the business banking services offered by some e-money firms. If you’re uncertain about what the firm is offering, the regulatory status (usually found at the very bottom of their website) will give a clue as to whether it is a PRA-regulated deposit taker or an FCA-regulated e-money firm. 

At some banks, businesses in certain sectors may have additional specific criteria that need to be met before being able to open an account, for example agriculture and social housing. 

Checklist

UK Finance offers a preparation checklist which covers different types of business structures and outlines what you will need to provide in order to open an account. Businesses should be as prepared as possible at the outset to avoid any further delay.

Alternative sources of finance

For businesses needing to access additional working capital there may be additional avenues which could be available depending on the nature of your business including asset-based finance. The Business Finance Guide can help you understand the different options and what may be required.