How does a business credit card work?

A business credit card allows companies to make purchases on credit and pay the balance later. You'll receive monthly statements and can choose to pay the full amount, a set sum, or the minimum – though only paying the minimum will lead to higher interest charges. Many business credit cards charge an annual fee, so factor this into your decision. Alternatively, business charge cards have no preset credit limit but require the full balance to be cleared each month, making them ideal for businesses with larger, predictable expenses. When choosing a card, always check the terms and conditions. Compare interest rates, fees, rewards, and credit limits to find one that suits your business's needs and spending habits.

Is my credit record checked for a business credit card?

Yes, when you apply for a business credit card, credit card providers will typically assess both your business's credit record and your company’s overall financial health. If your business has limited or no credit history, the card issuer may also check your personal credit score to evaluate your creditworthiness.

Does using a business credit card affect my personal credit record?

Yes – using a business credit card can affect your personal credit, especially if you're the primary account holder or have personally guaranteed the account. Many issuers check your personal credit when you apply, and your payment history can influence your score if you're liable for the debt. To avoid negative impacts, use your business card responsibly: pay on time, keep your balance low, and avoid maxing out your limit. If you’re worried about managing repayments, contact your card provider early – they may offer flexible options or help restructure your debt.

What rewards can I earn with a business credit card?

Many business credit cards offer attractive rewards programs designed to help you earn benefits on your business purchases. Common rewards include cashback, where you receive a percentage of your spending back, as well as air miles, travel points, or even shopping vouchers. To make the most of your rewards, it’s important to choose a business credit card that aligns with your company’s spending patterns. For instance, if your business frequently spends on travel, a card that offers travel rewards like air miles or hotel points may be ideal.

Can I check my eligibility before applying for a business credit card?

Yes, many business credit card providers allow you to check your eligibility online before submitting a full application. This process usually involves a soft credit check, which won’t affect your credit score. A soft check gives you an idea of your chances of approval. By checking your eligibility first, you can avoid unnecessary hard credit checks, which could impact your personal credit score and your business’s financial standing.

Can several employees have their own card?

Yes, many business credit card providers offer the option to get multiple employee cards under one account. This allows selected employees to have their own cards, while the business receives a single monthly statement for all charges. In addition, providers often offer spending controls, enabling you to set individual spending limits and easily monitor expenses for each cardholder. This can help streamline expense management and improve oversight of your company's spending.

Do I need a business current account to apply for a business credit card?

No, you do not necessarily need a business current account to apply for a business credit card. However, having a dedicated business bank account can significantly simplify your financial management, allowing you to separate your business finances from personal transactions, making it easier to track business expenses and manage your cash flow. A business current account can help you stay organised, streamline bill payments, and ensure smoother financial operations for your company. Many business credit card providers may even prefer applicants with a business account, as it shows more structured financial management.

Can I get a business credit card for my new company?

Yes, startups and new businesses in the UK can apply for a business credit card. A business credit card can be an essential tool for managing cash flow and covering initial business expenses in the early stages. However, as a new company, you may be required to provide additional information to demonstrate your ability to meet repayment obligations. To assess your eligibility, the provider may conduct a personal credit check (especially if you're a sole trader or have personal liability), request company financial statements, and ask for details about your business assets. This will help the provider determine your credit limit and the terms of your card. Keep in mind that approval may be more challenging for new businesses without an established credit history, but offering a personal guarantee or showing strong personal credit can help increase your chances of approval.

Are there any interest-free business credit cards?

Business credit cards in the UK typically aren’t fully interest-free, but many offer an interest-free period on purchases — usually between 20 and 56 days — as long as you pay the balance in full each month. If you carry a balance beyond the due date, interest will apply, so it's important to clear the full amount to avoid charges. Always check the card’s terms to understand the interest-free period and any fees. Choosing a card with a generous interest-free window can help manage cash flow, especially when spreading the cost of large purchases.

Is it worth having more than one business credit card?

The number of business credit cards you should have depends on your business's needs. If your business has varied expenses, like travel or supplies, multiple cards can help manage these categories and maximise rewards (e.g., cashback or travel points). However, it’s important to manage credit limits carefully to avoid high credit utilisation, which could affect your credit score. Multiple cards can also help with cash flow management by spreading out payment due dates, but make sure you can track and manage each account effectively. Ultimately, choose the number of cards that fits your business spending and financial management capabilities.

How do business credit cards impact business taxes?

Purchases made for business purposes using your credit card, such as office supplies or travel expenses, can typically be claimed as business expenses when filing your taxes. It's important to keep detailed records of all transactions to ensure they are valid tax-deductible expenses. Business credit card statements can be a helpful tool for tracking and categorising these expenses for your self-assessment or corporate tax returns. However, interest paid on outstanding balances is generally not tax-deductible, so it's crucial to manage payments and avoid carrying a balance. It’s generally a good idea to consult with an accountant to ensure you're complying with tax laws and making the most of available deductions.

How long does it take to get approved for a business credit card?

Approval times vary by provider. Some offer instant decisions, and you may even receive a digital card the same day. If additional verification is needed, approval can take a few days, and the physical card typically arrives within 5–10 working days. To speed up the process, have the following information ready: Business name and trading details Company registration number (if applicable) Financial figures (e.g., annual turnover) Personal details for directors or partners

Can I get a business current account with bad credit?

Yes, it’s possible to get a business current account even if you have bad credit, though it may be more challenging. Some banks and financial institutions offer business accounts specifically designed for people with poor credit histories. These will sometimes come with fewer features, but can still help you manage your business finances effectively. To improve your chances of being accepted for an account, you can take steps to enhance your credit history, such as paying bills on time, reducing outstanding debt, and regularly checking your credit report for errors.

How long does it take to open a business bank account?

Opening a business bank account typically takes between one and four weeks, though the process can be faster depending on the bank and your business type. Some banks even offer same-day account opening. Factors that can affect the timeline include your business structure (sole traders usually take less time), your relationship with the bank, and the application method. Some banks offer faster services, and non-residents or high-risk businesses may experience longer processing times. Once your application is submitted, the bank will conduct background checks and may contact you for additional information.

Can I use a personal current account for my business transactions?

While it’s technically possible to use a personal current account for business transactions, it’s generally not recommended. Keeping personal and business finances separate helps you stay organised, track expenses more easily, and simplify tax reporting. If you run a limited company, using a business current account is a legal requirement because your company is considered a separate legal entity. Sole traders aren’t legally required to have a business account, but opening one can provide tailored features, such as accounting tools.

What fees can I expect with a business current account?

The fees for a business current account can vary depending on the bank and the account type. Common charges to look out for include: Monthly maintenance fees: A fixed charge for maintaining your account. Transaction fees: Costs for deposits, withdrawals, and payments. Overdraft charges: Fees for accessing overdraft facilities. International transfer fees: Charges for sending or receiving money abroad. Debit card usage fees: Costs for using your business debit card, especially abroad. Some business accounts may offer free banking for an introductory period, so it’s essential to carefully review the fee structure to find an account that matches your business needs and budget.

Are business bank accounts protected by FSCS?

Yes, business bank accounts are protected by the FSCS up to £85,000, provided the bank is FCA or PRA-authorised. For small businesses or limited companies, protection applies if the bank fails. Sole traders have combined protection with personal accounts under one £85,000 limit. For more complex claims, eligibility may vary depending on your business type. Check with your bank for specific coverage details.

Can I have multiple business current accounts?

Yes, you can have multiple business current accounts. This can be useful for managing different aspects of your finances, such as separating operational expenses from tax savings, or tracking revenue for different projects. If you run multiple businesses, separate accounts for each can simplify accounting and financial reporting.

Do I need to maintain a minimum account balance?

Whether you need to maintain a minimum balance depends on the specific business current account you choose. Some banks may require a minimum balance to avoid fees or to access certain account features, while others may be more flexible. Review the account’s terms and conditions or ask your provider directly if you're unsure.

Are there any limitations on the number of transactions or cash deposits I can make?

Many business current accounts have limits on free transactions or cash deposits each month. Exceeding these limits may incur fees. Some accounts also cap the maximum cash deposit per day or month. To avoid extra charges, review the account terms and choose one that suits your transaction volume.

What happens if I close my business?

If you close your business, notify your bank and close your business current account. The bank will guide you through the process, which will typically involve settling any outstanding payments or fees. Any remaining funds can be transferred to a personal account or another business account.

Am I guaranteed an overdraft with a business account?

No, getting an overdraft with a business current account isn’t guaranteed. Just like with personal accounts, you’ll need to pass a credit check to be approved, and the overdraft limit offered will depend on both your financial circumstances, and the bank’s assessment of your business. If you need an overdraft, it’s a good idea to speak directly with your account provider to explore available options and understand the terms, including any fees and interest rates that could apply.

Is my business eligible to use the Current Account Switch Service?

Your business may be eligible to use the Current Account Switch Service if it meets the following criteria: Fewer than 50 employees Annual turnover of £6.5 million or less Both your current and new banks are part of the switch guarantee scheme If you're unsure whether your business qualifies, contact your new bank for confirmation and guidance on the switching process.

Can I have a business current account if I'm a sole trader?

Yes, sole traders can open a business current account, just like partnerships and limited companies. Having a dedicated account is smart as it separates personal and business finances, simplifying income tracking, expenses, and tax management. Many banks offer accounts tailored to sole traders with features like accounting integrations, invoicing tools, and business support, helping you manage cash flow and prepare tax returns more easily.

Can I use my business current account for personal transactions?

Generally, it’s not advisable to use your business current account for personal transactions. Keeping business and personal finances separate helps maintain clear records, avoid tax complications, and ensures compliance with accounting standards. Mixing personal and business expenses can lead to confusion and potential legal issues, especially when it comes to taxes and audits. Additionally, it's worth noting that many banks prohibit the use of business accounts for personal purposes.

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Partnership bank account: do you need a joint business account?

Business bank accounts for partnerships

Written by Rachel Wait, Contributing writerEdited by Lucinda O'Brien, Senior finance editor, 25 April 2025

Fact Checked

A business bank account could be beneficial to your partnership – and in some cases, it’s mandatory.

Only open a partnership business account with someone you trust.

If you’ve set up a business as a partnership, you may need to open a business bank account. Even if it’s not a requirement, there are many reasons why a business bank account can be valuable.

Key takeaways

You must open a business bank account if your business is a limited partnership or limited liability partnership
A general partnership doesn’t need to open a business bank account, but it can still be beneficial
Opening a partnership business account makes it easier to manage business finances together
Before opening a business bank account, be sure you trust your partners and have rules in place for managing the account

Keep personal and business finances separate with our best business bank accounts

Compare business bank accounts

Do I need a business bank account for a partnership?

Whether you need a business bank account depends on the type of partnership you have. There are three main types of business partnerships in the UK:

General partnership – Here, you and your partner(s) own the business between you. All parties must invest in the business, and you all take on personal liability for repaying any business debts
Limited liability partnership – This gives you more protection than a general partnership because each partner has limited liability, depending on how much they invest
Limited partnership – You must have at least one general partner to manage the business and accept unlimited liability for debts. You must also have at least one limited partner who typically can’t participate in managing the business and has limited liability for business debts

If your business is a general partnership, the business is not legally distinct and you do not need to open a business bank account.

However, if your business is a limited liability partnership or a limited partnership, the business and its owners are separate legal entities. This means you must separate your personal and business transactions, including opening a business bank account for your partnership.

How can a business bank account help your partnership?

A business bank account can help your partnership in several ways:

Separation of finances – It enables you to keep your business and personal transactions separate, making it easier to budget and complete your tax returns. This is particularly important when there are multiple partners involved
Professionalism – Clients and suppliers are more likely to take your business seriously when payments come from and go to a business account, rather than a personal one
Building business credit – Using a business bank account helps establish a credit profile for your partnership, which can be beneficial if you want to secure business loans or credit cards in the future
Shared access – You can set up a business account to allow access for all partners, with permissions based on roles. This keeps things transparent and makes managing finances a collaborative effort
Better financial tools – You may be able to sync your bank account with accountancy software to make financial management easier and more efficient
Accepting card payments – Having a business account enables you to accept customer credit card payments

What are the benefits of a business bank account?

There’s a wide range of benefits to opening a business bank account – even if you aren’t required to have one. These include:

Easier bookkeeping and tax reporting – A separate account simplifies tracking income and expenses, and preparing financial statements or tax returns
Access to tools and features – Unlike personal bank accounts, business accounts often include invoicing tools and other features that make managing your finances less stressful
Business support – Some business bank accounts include access to specialist support, such as an account manager or a dedicated customer service department
Overseas spending and international payments – Your bank account might include fee-free spending abroad, as well as low-fee international transfers, which could be useful if you regularly do business overseas

How to open a joint business bank account

If you want to open a partnership business account, look for a business account that you can open jointly. The application process is similar to opening other types of business accounts, but you need to provide information and documentation for all partners.

This includes:

Proof of ID and address
Certificate of formation, if applicable
Partnership agreement, if applicable
Evidence of partnership trading address
Companies House registration, if applicable
Estimated annual turnover
Contract of co-partners, if applicable

Tips for managing a partnership business bank account

Only open a partnership business account with someone you trust. Once you’ve opened your account, all partners have equal access to the company’s money, which means one person could withdraw cash without the other partners’ permission. However, some bank accounts let you define access levels, so not all partners need to have full control.

To reduce the risk of friction, it’s important to establish some ground rules and follow the tips below:

Choose one person to act as the main administrator of the account
Agree on who can withdraw funds and transfer money
Draw up an agreement to state what happens if a partner leaves or the business fails
Regularly review your agreement to ensure everyone is still happy with it

FAQs

What is the UK equivalent of an LLC?

In the USA, an LLC is a limited liability company. In the UK, the closest equivalent is a limited liability partnership (LLP).

Can a business partnership use a personal bank account?

You can only use a personal bank account if your business is set up as a general partnership. Even then, some banks might forbid you from using a personal bank account for business purposes.

Limited liability partnerships and limited partnerships must have a business bank account.

Can one partner open a bank account for the partnership?

Yes, but you should provide details of the partnership agreement, as well as the names and details of all partners. Most banks also require the consent and identification of all partners before they can fully open the account.

What happens to the business bank account if the partnership dissolves?

If the partnership dissolves, you need to ensure you’ve settled all outstanding payments and debts. Your partnership agreement dictates the distribution of any remaining cash – if you don’t have an agreement, the money is typically split equally.

You usually need to provide your bank with formal notice of the dissolution, signed by all partners, before it can close the account.