Bad credit can cause all kinds of problems including, in some cases, opening a business bank account. The good news is, it is a hurdle you can overcome, but it pays to know as much as possible about your options when it comes to business bank accounts for bad credit. Show
Banks and lenders use your credit score to decide if they will offer you certain products and at what rate they will charge you to do so. For example, if you apply to borrow money and your credit score is marked as ‘fair’ you may pay a slightly higher interest rate than someone who has a credit score of ‘good’ or ‘excellent’. What you may not realise is that a poor credit score can affect whether a bank decides whether to offer you a business bank account or not. Table of contents →Why might a bank reject you for a business account?Different types of bad credit and how problematic they might beWhich banks are more lenient or don’t credit check?What other factors can influence whether you will be allowed to open a business account5 of the best business bank account with no credit check• Tide• ANNA• Starling Bank• Cashplus• CardOneMoneyComparison tableBusiness bank accounts for bad credit FAQ Why might a bank reject you for a business account?There are many reasons why your application for a business account may have been declined:
The good news is that in all three cases, there are alternatives and other solutions. Different types of bad credit and how problematic they might beAround 40% of adults admit to missing one or more payments on bills and other accounts. The amount we have borrowed in the UK has grown by an average of just over £400 per person. The outstanding consumer debt in the UK equates to just under £4,000 per adult. Not all of this debt is ‘bad’. Borrowing is part and parcel of the UK economy, but when it does become problematic is when changes in circumstances mean that someone cannot meet all their financial commitments each month.
Which banks are more lenient or don’t credit check?Even with recent or historical poor credit rating, there are options when it comes to bank accounts. High street banks are still very traditional in their approach to opening bank accounts with potential customers often having to make an appointment to see an advisor. But there some high street banks that have created specific packages for this opening a business bank account with bad credit:
What other factors can influence whether you will be allowed to open a business accountBanks may not perform a credit check when you apply to open a business account, but they will make other checks that can help to make the journey a smooth one:
5 of the best business bank account with no credit checkWhen your credit score is poor, it can be tempting to jump at the first bank or financial company that offers the potential to open a business account without a credit check. But these accounts are not equal. It is important to look into the terms and conditions carefully, as well as any fees and costs. Some no credit check business bank accounts can have high fees, meaning you pay a lot to bank with them. The good news is, is that there are options when it comes to opening a business bank account with poor or bad credit: TideAvailable to partnerships, sole traders and limited companies, there is no credit check when you open a business bank account with Tide. One of the reasons is that they do not offer credit facilities. You have a free Tide Mastercard to use with your account that includes free purchase at home and abroad. It is also easily integrated with accounting software including Sage and Xero. ANNAAnother online challenger bank that offers free business banking as well as a great platform for organising accounts and finances. As with all bank account applications, you’ll have to prove your identity and also be over the age of 18. A great choice of bank account for bad credit, it doesn’t offer accounts to directors of limited companies who have been declared bankrupt. Sign up in under 10 minutes and enjoy 24/7 customer support. Starling BankSelf-employed sole traders can open an account if they have a personal account with Starling and they also offer business accounts to people with bad credit. Credit facilities are available, such as an overdraft but you will be credit checked if you apply for one. Your money – up to £85k – is protected by the FSCS and is also regulated by PRA and FCA, two important organisations in the financial world. To pay money or cheques into your account, you simply visit The Post Office. CashplusThis is the first bank on the list which charges for its account, although the £69 annual fee won’t break the bank. This business bank account does everything that you need it too with everyday activities such as setting up direct debits and standing orders. You can pay in cash over the counter at The Post Office as you can with Starling. Credit facilities, such as an overdraft, are available but ‘on invitation’ which means the bank approaches you, not the other way around. CardOneMoneyThis bank account for business is basic but functional. There are no credit checks, and you can use it to set up direct debits and standing orders, as well as pay in cash and cheques. It is also possible to accept payments in different currencies too. Simple it may be, but it is a functional account excellent for directors and sole traders with poor or bad credit history. Comparison tableBankMonthly feeCredit checksGood to knowTideNo✗No annual turnover limitGreat mobile appANNANo✗Great for organising accountsComes with their own invoicing systemStarling BankNo✗Credit facilities on applicationExcellent in-app supportCashplus£69 annual fee✗No limit on annual turnoverMust be UK resident and over the age of 18CardOneMoneyNo, but application fee of £55 applies✗Not open to anyone with bankruptcy historyBusiness bank accounts for bad credit FAQDoes your personal credit history influence your business account? There are 9 million people in the UK carrying significant debt. The reasons why we are in debt vary, from significant student loan debt to unemployment. It can, although some would argue that it shouldn’t, make a difference when it comes to opening a business bank account. If you have opened a limited company, business and personal accounts are kept separate and so it could be argued that your personal expenses have nothing to do with your business ones. Can banks refuse you a bank account? Yes, they can, and they are not obliged to explain the reasons why either. If you have been declared bankrupt or have a very poor credit rating, they can refuse you both a personal and business bank account. Why was my business bank account application declined? There are several reasons why a business bank application may be declined. An adverse credit rating of one or more directors is one, including if you are a sole trader. Some banks also don’t provide a business bank account for certain activities, such as gambling. Being unable to produce all the necessary ID documents can also be a reason to decline an application. Lack of evidence of trading or a poor business plan could also contribute a bank declining your application. Do you need a good credit history to open a business bank account? It helps but in the modern age of challenger banks, they have proved that poor credit history is no barrier to opening a basic, but fully functional business bank account. A good credit rating improves your chances of securing investment or a loan, however. What can I do if I keep getting rejected for a business account? Apply to one of the challenger banks on the above list as they do not refuse applications on the grounds of credit checks. If, however, your business is high risk, you may need a bank that offers a specific banking product. Can I open a business bank account with bad credit UK?Even if your business or personal credit score is lower than you'd like it to be, there are still business current account options available. These 8 business current account providers don't run a credit check before approving you. Their applications are online, fast, and straightforward.
What bank is best for bad credit?20 Checking Accounts for Bad Credit for 2022. Best Checking Account for Bad Credit of 2022. Chime® Checking Account. ... . Chime. With Chime®, a bad credit score is no longer a deal-breaker. ... . Current. ... . Chase. ... . Axos Bank. ... . Aspiration. ... . Banks that Don't Use ChexSystems. ... . Second Chance Checking Accounts.. |