Business Bank Account - Bad Credit

[skov]

Hi All,

I started a limited company recently, but I'm struggling to open a bank account for it.
The problem is I have a very poor credit history - I defaulted on some debts following a nasty break-up a few years back, and I'm currently paying them off through an IVA.
I've tried a few banks now, but none of them want to know, even if I tell them I absolutely do not want or need any kind of credit facility. It's always a case of 'computer says no' when it comes to the credit check.

Does anyone know of any basic business accounts I might stand half a chance of opening?

Failing that, could I transfer the business into my current wife's name and get her to open a bank account, then transfer it back?

[pmeswani]

Hi All,

I started a limited company recently, but I'm struggling to open a bank account for it.
The problem is I have a very poor credit history - I defaulted on some debts following a nasty break-up a few years back, and I'm currently paying them off through an IVA.
I've tried a few banks now, but none of them want to know, even if I tell them I absolutely do not want or need any kind of credit facility. It's always a case of 'computer says no' when it comes to the credit check.

Does anyone know of any basic business accounts I might stand half a chance of opening?

Failing that, could I transfer the business into my current wife's name and get her to open a bank account, then transfer it back?

Simple answer is speak to the bank.

In your situation, you are better off going via an Umbrella company until your credit history situation gets resolved.

If you insist on having the business in your wife's name, you could open a business in your wifes name and you could act as an employee of the business. In terms of legality and accounting, I don't know how practical this solution is. So I would advise getting legal and accounting advice to cater for your situation if you wish to go down this route.

[skov]

Simple answer is speak to the bank.

In your situation, you are better off going via an Umbrella company until your credit history situation gets resolved.

If you insist on having the business in your wife's name, you could open a business in your wifes name and you could act as an employee of the business. In terms of legality and accounting, I don't know how practical this solution is. So I would advise getting legal and accounting advice to cater for your situation if you wish to go down this route.

I've tried speaking to a few banks, in branch, over the phone, and by email. They're very nice and friendly until they do the inevitable credit check, after which they don't want to know.

I don't particularly want to run the business in my wife's name. Just wondered if I can transfer all the shares to her and make her director, get her to open a bank account for the company, then transfer the shares back and reinstate myself as director.

[cojak]

I've tried speaking to a few banks, in branch, over the phone, and by email. They're very nice and friendly until they do the inevitable credit check, after which they don't want to know.

I don't particularly want to run the business in my wife's name. Just wondered if I can transfer all the shares to her and make her director, get her to open a bank account for the company, then transfer the shares back and reinstate myself as director.

I think that could be considered a fraudulent action, even though you have no intention to defraud.

I would use an umbrella until your finances have stabilised

[Wanderer]

Failing that, could I transfer the business into my current wife's name and get her to open a bank account, then transfer it back?

You may find that your credit reports are linked... They used to do it like that years ago, I don't know if it's been changed now or not. Have you got a copy of your credit report? If not then it may be worth checking it to see if there is anything you don't know about on the report that you need to get corrected.

Good luck!

[pmeswani]

I've tried speaking to a few banks, in branch, over the phone, and by email. They're very nice and friendly until they do the inevitable credit check, after which they don't want to know.

I don't particularly want to run the business in my wife's name. Just wondered if I can transfer all the shares to her and make her director, get her to open a bank account for the company, then transfer the shares back and reinstate myself as director.

Technically, you could do it. Legally, you may not be able to do it.

Speak to an accountant to see if there is a bank that could allow you to open a business bank account with your credit history. Otherwise, you will need to go down the road of an Umbrella PAYE company until your credit history issue has been resolved.

[matzie]

I just googled for "business banking bad credit uk" and found UK Bad Credit Business Bank Account - selling info for £40, so "caveat contractor"... good luck!

[pmeswani]

I just googled for "business banking bad credit uk" and found UK Bad Credit Business Bank Account - selling info for £40, so "caveat contractor"... good luck!

Personally, I would be concerned about any company that offers a business bank account to anyone with credit history issues. I would be wondering what the caveats would be and if any company would recognise that type of account. I would suggest that the OP does some basic research in terms of what these types of accounts offer, and find out what the catches are before jumping in.

[Jubber]

I've always been led to believe that for LloydsTSB business accounts the account managers have a certain amount of discretion when computer says no. With personal accounts forget it, but business is different.

I suggest if you haven't tried already make an appointment to see someone at Llloyds and before they start the process of opening an account be completely straight with them of what your situation is. Get a copy of your current credit file (£2 at experian) and take that with you.

[skov]

I've always been led to believe that for LloydsTSB business accounts the account managers have a certain amount of discretion when computer says no.

LloydsTSB were the first bank I tried - the lady I spoke to (one of their business 'specialists' that floats from branch to branch) told me she couldn't override the computer's decision!

After reading back the idea of using my wife's name it does sound somewhat dubious at best, so I might just give that idea a miss.

I have to admit, I don't know too much about umbrella companies. I'd pretty much dismissed them, as I wanted to use the Ltd company to launch a couple of product ideas I have in parrallel with the contracting/consulting. Presumably I couldn't use an umbrella for that sort of thing?

I'm getting tempted to pay the 40 quid to get the 'info' on the bad credit business account. I'd hoped I might get the info for free, but I guess £40 isn't much in the great scheme of things...