Reply to: Business Bank Account question

[PerfectStorm]

I've worked out what the magic secret to getting accepted onto Monzo is. Applying for a Business Pro account at £5 a month, thereby suddenly they can support your type of business. The first month is free, and you can downgrade after that

[Grah]

Thanks for the answers guys. I was on holiday between gigs last week so didn't look at a computer for work all week. Heaven.

Will sign up my company with my own bank.

Cheers,
Grah

[PerfectStorm]

No issue at all. In fact, for a new business, it can be helpful as the bank will already have history on how you conduct your account which will make KYC checks easier.

You quite often get the very fastest Faster Payments times too.

[hobnob]

Any downsides of using the same bank as I have my personal account with?

There's no inherent downside, and I have my business/personal account with the same bank. However, there is a potential risk if that bank had problems, i.e. you wouldn't be able to access your personal money or take a loan from the business.

As a specific example, I knew some people who were working for BCCI (the Bank of Credit and Commerce International) when that collapsed in 1991. All employees had to have a BCCI bank account, and their salary was paid into that each month. Some people then set up a standing order to automatically zap the money over to their "real" account the following day, while other people just used the BCCI account as their main account. So, when the bank shut down, they lost their jobs and they couldn't access any of their savings, which wasn't a happy time. I promised myself that if I ever worked for a bank then I'd move my money to a different bank.

I think it's lower risk if you're using a big bank (e.g. Barclays). Also, even if you did lose access to both bank accounts, you'd only have to last out until you got the next payment from your client. So, in practical terms you should be fine.

[ladymuck]

I decided against them.

Any downsides of using the same bank as I have my personal account with?

To be clear I do not mix the two or conduct business activities through my personal account.

No issue at all. In fact, for a new business, it can be helpful as the bank will already have history on how you conduct your account which will make KYC checks easier.

[Grah]

I decided against them.

Any downsides of using the same bank as I have my personal account with?

To be clear I do not mix the two or conduct business activities through my personal account.

[PerfectStorm]

It says on the header page No monthly fee and free day-to-day digital banking. Dug a bit deeper into their tariffs - You do have to pay 95p per manual debit and credit and a few other stuff for borrowing. I am not going to be doing the latter but it is a matter of working out how many manual debits one does in a month.

You could also question their definition of 'day-to-day digital banking' - is a manual debit not digital banking?

I saw that and wondered what ‘manual’ meant in that sense - is it a CHAPS, or a Faster Payment? Is it free is automated with a date and charged if done instantly? Their tariff doesn’t seem to clarify.

[Grah]

It says on the header page No monthly fee and free day-to-day digital banking. Dug a bit deeper into their tariffs - You do have to pay 95p per manual debit and credit and a few other stuff for borrowing. I am not going to be doing the latter but it is a matter of working out how many manual debits one does in a month.

You could also question their definition of 'day-to-day digital banking' - is a manual debit not digital banking?

[Grah]

Virgin M for business appears to be free for the foreseeable future unless I'm missing something

https://uk.virginmoney.com/business/...-for-business/

I saw the other day and was similarly suspicious based on the theory that it seems too good to be true so there has to be a catch. Is Richard still involved? He might be trying to get the numbers up so he can flog it off.

[SueEllen]

I'm baffled, I'd have thought IT contractors would be right up their street. Happy to use online/smartphone apps for banking. Unlikely to have much/any cash/cheque demands. Limited number of transactions. Potentially fairly high balances with negligible expectation of interest.

They probably have their quota of IT contractors so want businesses who run up overdrafts and use other services they charge for.

Anyone can check if they have a similar name to someone on the sanctions list as it's available on gov.uk

[Maslins]

I'm baffled, I'd have thought IT contractors would be right up their street. Happy to use online/smartphone apps for banking. Unlikely to have much/any cash/cheque demands. Limited number of transactions. Potentially fairly high balances with negligible expectation of interest.

I wholeheartedly understand the "low hanging fruit" idea, so totally understood why they politely told us to go elsewhere...but I'd have thought simple one person consultancy businesses would be their low hanging fruit.

If they say they can't tell you why, makes me wonder if it was an AML flag raised as part of their due diligence. Not suggesting you've done anything dodgy, but on occasion our checks raise weird stuff. Perhaps you've got the same name as a "person of interest". A politician, or sanctioned oligarch! Flags like this don't stop them/us taking people on, but they/we need to do extra checks. Possibly they decided wasn't worth the effort.

Or possibly they've just got tons of new customers/are understaffed atm and are fobbing people off whilst they get on top of things.

[PerfectStorm]

You probably don't use enough services and get in enough debt for them on your personal account.

Quite possibly. I don't have 'Plus' and don't get overdrawn, no loans etc.

[SueEllen]

Nope. One owner, no crazy turnover, listed as IT Consultancy. Was a case of (in typical banking style) "we can't have you as a customer and we can't tell you why"

Not very 'challenger bank' of them

You probably don't use enough services and get in enough debt for them on your personal account.

[northernladuk]

Very much "challenger bank" of them - accept the businesses they understand and they don't seem to particularly understand 1 person consultancies so they aren't interested.

To be fair that's exactly what I expected from these 'challenger banks'. They are out to cream of the masses of low hanging fruit, not to engage in complex situations. Many banks and mortgage lenders don't understand the complexities of small set ups like us so I didn't think for one minute many of these new set ups would be interested. It does appear I've been overly pessimistic on them as reading the threads about them they seem to have come a long way but I'm still not surprised these setups aren't great at some areas yet.

[eek]

Nope. One owner, no crazy turnover, listed as IT Consultancy. Was a case of (in typical banking style) "we can't have you as a customer and we can't tell you why"

Not very 'challenger bank' of them

Very much "challenger bank" of them - accept the businesses they understand and they don't seem to particularly understand 1 person consultancies so they aren't interested.