Don’t fall for a flashy marketing campaign or make the mistake of choosing your business bank based purely on who you personally bank with.
Business banking is very different from personal banking. Firstly, expect more charges for things you normally get for free with your own personal bank such as paying in cash or cheques at a branch, getting your first arranged overdraft, etc.
For startup businesses, there are many offers around where the major banks try to woo your business by offering incentives such as free banking services for 12, 18 or even 24 months. Some even allow ongoing free banking if you meet certain conditions.
The main things you will want to consider will be based on your own business circumstances. Do you expect a lot of incoming funds per sale of your product or service? Will you get paid by BACS, CHAPS or in cash or cheques? Are you expecting to run close to the bread line for the first few months of your business? Do you have complex requirements for you which you will need the assistance of your bank manager on a more frequent basis? How important is online banking to you?
These are all questions you need to ask yourself before going out there into marketplace. The bigger banks typically offer free introductory offers as mentioned above, however the newer banks and international ones also deserve a close look. Santander, Halifax, Co-op and Metro Bank are alternatives to the normal set of banks such as HSBC, Barclays, RBS, Lloyds or Natwest. Each one will have something to offer you so do speak to each one before deciding. Changing banks afterwards is possible and is now far simpler than it used to be but it will take you away from your main job – the job of running your business.
Oh and don’t get hung up about where your branch is. Apart from this address appearing on your cheques, a ‘local’ branch means very little these days. Its the service, costs and features that should be on your shopping list ensuring the business bank you choose matches what your business needs.