Business bank account with poor credit rating - who should I turn to?

[goldengoddess]

Hi, I wonder if someone will be able to advise. I need to set up a business bank account, but unfortunately am having problems with some of the high street lenders as my husband and I are on a debt management plan which has adversely affected our credit history. We are well on track to paying off this debt, haven't missed a payment, are fully up to date with all our household bills/mortgage etc, and the business is doing well.

Already have a personal/joint current account with Royal Bank of Scotland and First Direct, but we are drawing a blank with opening a new account with our poor credit rating.

Can anyone recommend a bank who may be a bit more accomodating than the big names on the high street? Would be very grateful if someone could help. Many thanks!

Have you tried Santander? They gave me one after opening online. I was very surprised as I also had bad credit and had been turned down by my own bank (lloyds)

Hi Bailey no we haven't tried Santander will give them a go. Thanks!

OP,

Also, try one of the challenger banks.

Monzo Starling...

What about a credit union? Sone of them assist business start ups - depending on your business, you could state your social responsibility is supporting your local economy?

Yes we also have a Monzo account but we need a business bank acct, not just a run of the mill current account.
I've come across Cashplus does anyone know anything about them? They don't do credit checks and aren't a bank as such, but do offer bank accounts.

Sorry, OP.

Starling do a business acount that you can sign up for in minutes. Have a Google and read some of the reviews.

I wouldn't recommend cashbuilder.

Starling is a quick way to get a business account and build your crefit history then you have a business history if you then want to change to the high street banks.

I don't think Starling offer business accounts to people on DMPs. Be careful about applying for too many because you'll lower your chances even further for 6 months.

Santander is a good shout; and I've heard of people using Cashplus but have no direct experience.

Apparently Revolut offer business banking to people with poor credit, but you'd need to check whether being in a DMP is okay.

Im using cashplus at the moment, its doing the job it needs to do but im only going to use it for maybe another year and then go to a high street bank when my credit rating is higher

Thanks for the recommendations - though have just realised it wouldn't be a good idea for us to approach Santander as they are one of the banks we owe money to and are repaying via the DMP!

I haven't actually made any formal applications yet, as am wary as you say Anchor, or raising red flags with a flurry of applications. hence asking everyone here for any recommendations of banks that look more kindly on those on a DMP.

To be honest I don't really understand why banks are reluctant to offer accounts to people with a poor credit history, as long as they don't offer overdrafts/credit cards. If you have no access to credit, why is it risky for banks to take you on and offer you a current account? And most which offer business accounts actually charge for the service, so they are making money out of you.

Molemonkey, why are you going to switch from CashPlus? Aren't you happy with the service? Don't they offer a full range of services in line with the usual high street banks?

They do offer more or less the same as a high street bank BUT for example if you miss the cut off time of 5pm on a friday you have to wait till monday before any cash can leave your account.

Why do you need a business bank account, what services does it offer that a normal current account doesn't? Lots of people run businesses from normal current accounts.

It's not acceptable to run a business from a personal current account especially if it's a cash facing business.

Any accountant will tell you that.

Yes Absent that's what we have been told by our accountant . Also banks won't let you open up a normal bank account with a name other than your own. Ie they won't let you use a normal account tin the name ofWidgetsRUs for example.

Are you having any luck @goldengoddess?

It's difficult enough to open a business bank account. I know. I had to jump through hoops with mine. It took three months in all.

I think we will make an application to Cashplus tomorrow as they seem to offer all the benefits of a business account but don't do credit checks. The only high street bank we have tried so far is metro and they turned us down. But didn't want to apply for too many before asking mumsnetters for advice, as that can adversely affect your credit score. (Not asking for advice but making multiple applications! )

I understood. :)

It's a start with Cash plus. Effectively all you need is an account and sort code, with your business name to get you going.

I'm going to ask Starling regarding the DMP . Will come back to you and let you know. I know on my DBs business account, one of his directors is on a DRO and he's a named signatory on the account.

Good luck though. Tough doing start up.

Thanks Absent, I am sure we will find someone to take us on!! The business has actually been running for a few years now, and growing year on year, but to date the finance side of things has all been looked after by our business partner. However, we now need to formalise things, and open a joint business account with him, hence my original post.

Starling. Offer a business account. And don’t do credit checks unless you want an overdraft. Excellent bank.