Business Bank Accounts for Small Businesses, Contractors & Freelancers

The most obvious option would be to use your personal banking provider. However, as convenient and simple as that may be, not every bank provides the same benefits and perks for their business account customers.

Finding the right business bank account can save you time and money. The last thing you want is to spend more than you need on services that you won’t use, or on fees that could be avoided with a different bank.

Once you’ve opened a business bank account, remember to regularly assess and review your position and options and compare different banks on the key factors that matter most to you as your business grows. It’s important that you get the best possible service and value.

A business bank account is a legal requirement for limited companies. Ultimately you need a business bank account so you can get paid and setting up a separate account will allow business finances to be clearly separated from your own personal finances. This makes accounting and bookkeeping much easier and more efficient.

If you operate as a sole trader, it might seem easier to use your personal bank account for your business, but there are significant benefits from opening a business bank account.

Having a dedicated business bank account makes it much easier to calculate your taxes, track your business transactions & expenses and manage cash flow.

It also adds a level of credibility and professionalism to your business and it can enable access to credit and loans that might not otherwise be available.

Gorilla Accounting has partnered with Mettle, the FREE business bank account by NatWest.

There are various types of transactions that will go through your business bank account in both directions.

These transactions may include:

• Receiving payments from clients
• Paying your salary
• Paying dividends to shareholders and to yourself if you operate through a limited company
• Paying PAYE tax and National Insurance for any employees
• Paying your annual corporation tax bills
• Claiming for your personal expenses
• Paying for business expenses
• Quarterly VAT payments

There are many things to consider before you apply for a business bank account. One size doesn’t fit all and you should look for an account that is best suited to the specific needs of your business.

Key considerations include what fees are charged, if there are any account minimums and how competitive the interest rate is. You should look for a bank that has excellent customer service in case you have any questions or queries.

Accessibility is also key so look for a bank that has branches and ATMs in convenient locations. Also consider any additional services needed such as payroll or credit card processing.

Most high street banks offer business bank accounts but there aren’t many specialist providers such as Mettle whose services are specifically tailored for contractors, freelancers and small businesses. With this in mind, you will need to compare those available to find one that best fits your business needs.

There are various factors you should take into consideration prior to making your decision:

• Charges and fees – Some banks will try to tempt you with great introductory rates which may seem too good to be true, but fees can soon increase after they expire. You don’t have to worry about fees, hidden charges or unexpected surprises when you bank with Mettle, the FREE business bank account from NatWest. Click here for more information.
• Reach out – Which banks do your clients and contemporaries use? Asking for advice from those who have tried and tested an account can help you make an informed decision, as well as researching and reading reviews online.
• Online banking – The bank you choose should offer easy to use, secure online banking including mobile banking and integration with accounting software such as FreeAgent.
• Interest rates – It’s important to get the best rate of interest on in-credit balances so that your money works harder for you.
• Account minimums – Some banks have a minimum balance requirement for you to be able to open and maintain a business account, so it’s a good idea to look for an account with low (or no) minimums.

There are various types of fees that a business bank account can charge and they vary from bank to bank. Examples of these fees include:

• Cash handling fees – The bank may charge you a fee for handling cash if you make regular cash deposits or withdrawals.
• Overdraft fees – If your bank provides an overdraft facility, you may be charged if you use it.
• Transaction fees – The bank could charge a fee for each transaction made, including transfers, withdrawals and deposits.
• Monthly maintenance fees – Some banks will charge you a monthly fee to maintain a business account.

Other types of fees include account closure fees, wire transfer fees, stop payment fees and charges for paper statements.

It’s important, therefore, when choosing a bank to review their charges and fees in detail so you don’t get any nasty surprises and minimise the amount you pay to use your account.

With Mettle, you don’t need to worry about charges and fees as the account is 100% free.

When opening a business bank account, there are several things to consider.

You will be subject to some checks when you apply to open your account and will usually have to provide various forms of documentation and identification.

These can include your certificate of incorporation, copies of your memorandum and articles as well as details of any shareholders you have. The bank will also require proof of identity such as your passport.

However, Mettle works differently. To open a Mettle account, you’ll need just one of the following forms of identification:

• A valid passport
• An EU national identity card
• A full or provisional UK driving license (photocard)
• A UK biometric residence permit (BRP)

The time needed to set up a business bank account varies depending on which bank you are joining and the complexity of your business.

It will take less time to open the account if it’s with the same bank that you have your personal account with, but this isn’t necessarily the best option from a business perspective.

Depending on the checks required to confirm your identity and (if applicable) the identities of others involved with your limited company, the process can generally take anywhere between a few days and a few weeks.

With Mettle, you can apply for an account in minutes and the review of your application will usually be complete in 72 hours (excluding weekends).