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What our Nerds say about business bank accounts with no credit checks
Business bank accounts with no credit checks are designed to help companies with a poor credit history or no credit history at all to access business banking.
As with traditional business bank accounts, they offer everyday business banking services that can help companies manage their finances more easily.
You need a business bank account if you have set up a limited company in the UK. This is because a limited company is considered an independent legal entity, so you’ll need to keep your finances separate.
It is advisable to have a business bank account if you are a sole trader as well, to help simplify managing your company’s expenses. A business bank account also helps with accurate record-keeping and filing self-assessment tax returns.
Having a business bank account is really important for both limited liability companies and sole traders that need to apply for business finance.
This is because most lenders won’t consider applications for business loans unless you have a separate business account.
Read on below to find out how business bank accounts for bad credit work, their features and how to apply for one.
Partner SpotlightBusiness accounts that don’t require a hard credit check, from top UK providers, including:
Can I open a business account with bad credit?
It is possible to get a business bank account if you have bad credit or no credit history. Business accounts with no credit checks are designed to help companies manage their finances regardless of their credit rating.
Business accounts for bad credit may be useful for managing your company’s expenses. They could help to
- Separate your business accounts: Keeping your business and personal accounts separate helps you keep accurate records of your finances.
- Get access to business finance: Most lenders require companies to have a business bank account before they lend money.
- Looks professional: Having a separate business bank account can help you look more professional to customers.
What are the features of a business bank account with no credit checks?
Most business bank accounts with no credit checks offer the following features:
- debit card
- online banking
- scheduled and recurring payments
- cash deposits
- spending insights
- business expense cards
- invoices
- Post Office banking
- customer support
- account manager or account management tools
What are the benefits of a no credit check business account for someone with bad credit?
A business bank account with no credit checks can offer the following benefits:
- No credit checks: Business bank accounts for bad credit don’t run credit checks when you apply for an account.
- FSCS protection: Some providers offer protection for up to £85,000 of your money under the Financial Services Compensation Scheme, but your business will need to meet certain eligibility criteria.
- Spending insights: You can keep track of your company expenses digitally and get instant payment notifications.
- Digital invoices: Some providers offer digital invoices to help you keep more accurate payment records.
What are the disadvantages of a no credit check business account for someone with bad credit?
The main disadvantages of a no credit check business account are:
- No overdrafts: Unlike traditional current accounts, most business accounts for bad credit don’t come with an overdraft facility.
- No interest: Business accounts for bad credit don’t usually offer interest on in-credit account balances.
Am I guaranteed a business bank account with no credit check?
A business bank account with no credit is not guaranteed. Companies need to meet the provider’s eligibility criteria and accept their terms and conditions before they qualify for an account.
Is it free to open a business bank account with no credit check?
Most business bank accounts with no credit checks charge fees, transaction charges or both. Some business bank accounts with no credit checks are free to open but charge a monthly account fee later on if your business income increases.
Common fees for business bank accounts with no credit check to look out for include:
- foreign transaction fee
- cash withdrawals
- direct debit payments
- issuing additional or replacement cards
- admin and sending letters
- account management tools
How do I open a business bank account without credit checks?
You can apply for most business bank accounts without credit checks online and will need to supply the following information:
- Personal details: your name, address and contact details
- Partner details: the details of anyone else using the account including partners, directors and employees
- Business details: the name, legal status and contact details of your business
- Business finances: estimated turnover and any bankruptcy information
Some providers may request documents to prove your identity, such as a passport or driving licence. You may need to provide proof of address and send a utility bill, council tax or bank statement from within the last three months.
The length of time it takes to open a business account without credit checks varies between providers and some accounts can be opened within minutes.
No credit check business bank accounts FAQs
Yes, it is possible to open a business bank account with a county court judgment (CCJ). Business bank accounts with no credit checks don’t run a hard credit search when you apply for an account. That means that if you have poor credit or little credit history at all, you can still apply for an account.
Providers may run a credit search depending on the type of business account you apply for. Most banks run a hard credit search if you apply for a traditional business bank account. Business bank accounts with no credit check don’t require a credit search when you apply for an account.
It depends on the type of business bank account you apply for. Applying for a traditional business bank account may affect your credit score because providers run a hard credit check when you apply for an account, which may affect your credit score. Your credit score is unlikely to change if you apply for a business bank account with no credit check because providers do not look through your credit history when an application is made.
Some lenders look at both your personal credit history and your business credit history when you apply for a business bank account. So a poor personal credit history may impact on your ability to access financial products for your business.
If you are a sole trader, any bank accounts with an overdraft facility will appear on your credit report. That’s because your business is not legally separate from you and your finances are considered one and the same. If you have a limited company, your business accounts will show up on your business credit report rather than your personal credit file. It is treated differently because a limited company is considered a separate legal and financial entity.
If you set up a limited company, the business is considered a separate legal entity to you and will have its own business credit score. Having a good business credit score can help you access a wider range of business finance at lower interest rates, while a lower business credit score can limit the products available to your company.
Yes, it is possible to be a director with bad credit because a limited company is a separate legal entity from you, so your personal credit score may not directly affect the business.
These simple tips can help to improve your business credit score:
- Pay invoices on time: Paying your creditors on time shows that your company is reliable with repayments and good at managing money.
- File accounts on time: Filing business accounts with Companies House and tax returns to HMRC on time can help improve your credit score.
- Limit credit applications: Making lots of credit applications can negatively affect your credit score, which could affect your chances of being approved for credit.
Not all banks offer business bank accounts with no credit checks. It’s always worth checking the terms and conditions of the business accounts on offer before applying. If anything is unclear, get in touch with their customer service team for clarification.
In the UK, if you have a limited company you need to open a separate business bank account because a limited company is a separate legal entity to you, so you have to keep your personal finances separate from your business ones. It is possible to use a personal business account for company expenses if you are a sole trader. But this can make managing your company finances tricky. It may be easier to keep more accurate records by opening a separate business bank account.
A business bank account application may be denied for many reasons including if:
- You don’t meet the provider’s eligibility requirements.
- The identification documents you provided are invalid.
- You have a fraud conviction.
- You’re suspected of money laundering.
- You have a poor credit history.
It’s worth asking a lender why you have been refused a business bank account. If it is related to incorrect information in your application or sending the wrong documents, you may be able to reapply with the correct details. If you have been refused due to your credit history, it may be worth considering a no credit check business bank account or a prepaid business bank account, which does not run a credit search during the application process.
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