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

Depending on the provider, it could take a few days or a couple of weeks for the business credit card to arrive in the post. Once you submit your application it will need to be reviewed by the card issuer but that is normally approved quickly.

Is a credit record checked for a business credit card?

Credit card providers usually check your business's finances and credit record when you apply for a business credit card. If your business doesn't have much credit history, your personal credit history may be checked.

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

Using a business credit card could affect your personal credit card, particularly if you're the main account holder. It's best to use a business credit card sensibly, as you would a personal credit card, If you're worried about repayments you should speak to the card provider as soon as possible.

Can I get a business credit card with rewards?

Yes. You can get business credit cards that give you back a percentage of what you spend back as cashback. Others offer air miles or other rewards, such as shopping vouchers.

Can several employees have their own card?

Yes, you can get several credit cards for one account, meaning selected employees can have their own card with the business paying just one bill.

Do I need a business current account to apply?

No. Having a business current account isn't necessary to get a business credit card, but having one could make paying your bill and handling your finances easier.

Can I get a business credit card as a startup?

Yes, there's nothing to stop you from applying for a business credit card as a startup - it might be a helpful tool as you're starting out too as you try and manage your business' cash flow. But because your business is new, you may need to provide additional information to evidence that you'll be able to keep up with repayments. It will also help the provider determine your credit limit. This might mean providing a personal credit history check, company statements and details of any assets.

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

Yes, business current accounts are available for sole traders as well as partnerships and limited companies.

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

It's generally not advisable to use a personal current account for business transactions, as it can lead to complications in managing finances and accounting. If you have a limited company, then a business bank account is a legal obligation as your limited company is a separate legal entity.

What fees can I expect with a business current account?

Fees vary depending on the bank and the type of account. Common fees include monthly account fees, transaction fees, and charges for additional services

Can I get a business current account with bad credit?

It can be more challenging to get a business current account with bad credit, but some banks may offer options specifically designed for businesses with poor credit history. Taking steps to improve your credit history and ultimately your credit report can be helpful too.

Can I have multiple business current accounts?

Yes, you can have multiple business current accounts. It can be useful for separating different aspects of your business or if you have multiple businesses.

Do I need to maintain a minimum account balance?

Whether you need to maintain a minimum account balance depends on the specific terms and conditions of the account. As with any bank account you might open, it's important to check specific terms and ask the account provider if you're still unsure.

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

Business current accounts may have limitations on the number of free transactions or cash deposits you can make each month. Additional fees may apply if you exceed the limits.

What happens if I close my business, can I close my business current account?

If you close your business, you should inform your bank and close your business current account. The bank will guide you through the process, and any remaining funds will be transferred to another account.

Am I certain to get an overdraft with a business account?

There's no guarantee you'll get an overdraft with your business bank account. Just like with a personal bank account, you'll still need to pass a credit check to be approved for an overdraft facility, and the amount approved can differ depending on your circumstances. If you need an overdraft facility for your business then it's worth speaking to your account provider to see what options are available to you.

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

You can use this service if your business has fewer than 50 employees, an annual turnover of £6.5 million or less, and both your current and new banks are part of the switch guarantee scheme. If you're unsure whether your business qualifies, it's best to contact your new bank for more information.

Do I need a business account for a business loan?

In terms of whether you need a business account for a business loan, it depends on the loan and lender. Some banks may insist that you have a business current account with them before they will accept you for a loan.

Do I need to be the owner of a company to get a loan?

No, you don't need to be the owner of a company to get a loan. Registered company directors can apply for most business loans.

Can my small business get a loan?

Yes, small businesses can get loans, but you may be offered different ones depending on your firm's size and revenue. For instance, only new businesses can get government start-up loans.

Does my business have a credit record?

Yes, your business does have a credit record and it may affect whether or not your loan application will be accepted. You can find the credit score for your business on the Experian website.

Could I lose my home if my business defaults?

You could lose your home if your business defaults. It all depends on the type of loan you choose, whether it is secured against your home and if you sign a director guarantee. Always check the terms and conditions carefully before agreeing to any loan.

How long does it take to be approved?

The length of time to be approved for a business loan depends on the provider, the checks they carry out, the information they need to see and how quickly you're able to provide it. It also depends on the type of loan - for example secured loans can have longer approval times.

Is it possible to pause payments when the loan account is open?

If you experience financial difficulty during the term of your loan, you may be able to request a payment holiday. This is where repayments are paused for a period of time. You'll need to speak to the loan provider in the first instance - and you should do so as soon as you experience any financial difficulty.

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How To Use a Business Savings Account Effectively

How to use a business savings account effectively

Written by Jessica Bown, Finance WriterEdited by Lucinda O'Brien, savings expert, 9 September 2024

Fact Checked

Used effectively, business savings accounts can help you to meet your business savings goals. Check out our short guide to find out how.

A businessman on a laptop reviewing company finances.

With a business savings account, you can earn interest on any money you don’t spend.

A business savings account makes it easier to build up a nest egg for your business by separating your savings from your main business bank account. Having money set aside in this way allows you to plan ahead and reduces the likelihood of unexpected expenses landing your company in financial hot water.

How should I use a business savings account?

A business savings account lets you separate money you want to put away from the operating funds required to keep your company afloat.

This separation makes it easier to save up for everything from big purchases and investment opportunities to payouts for unforeseen events and expenses.

In most cases, you also earn interest at a higher rate than on a business bank account, meaning you can grow your savings more quickly by using a business savings account.

Several types of business savings accounts are available. The best one for you will largely depend on how much access you need to your business savings, as well as how much you have to deposit in the account.

The different types include:

Instant or easy access accounts – these accounts let you dip into your business savings when you want but generally pay lower interest rates than accounts with withdrawal conditions
Notice accounts – these accounts usually require you to give seven to 180 days’ notice when you want to make a withdrawal but offer higher interest rates in return
Fixed-term accounts – with terms ranging from six months to five years, these accounts pay the best interest rates but impose penalties if you make a withdrawal before the term ends

Read more:

Earn extra interest on your business savings.

Compare business savings accounts

What is the best way to manage business savings?

If you have a limited company, you are legally required to keep your business and personal finances separate. This means you’ll need to keep business savings in a dedicated business savings account rather than a personal one.

However, if you’re a sole trader, you can move money between your business and personal accounts, meaning you can use a personal savings account to house your business savings.

Either way, as with personal savings, the best way to save for your business is to put money away regularly. Once you’ve worked out how much you can afford to save per month, it’s sensible to set up a standing order to automatically transfer that amount from your main account to your savings account.

To maximise your savings returns, you also need to shop around for the best business savings account for your needs.

The aim is to earn as much interest as possible, but you also need to ensure you are not overpaying for account fees and have suitable access to your savings pot.

How much should a business have saved?

The amount you need to put away for your business depends on your savings goals.

For example, if you want to buy new business premises, you’ll need to save significantly more than if you simply want a buffer to cover unexpected outlays.

Common savings goals for businesses include:

Paying an annual tax bill
Paying VAT (if your business is VAT registered)
Paying off debts
Buying new equipment
Acquiring a rival business

When it comes to ‘rainy day’ savings, meanwhile, it’s a good idea to have enough in your business savings account to cover between three and six months’ worth of operating expenses.

That way, you’ll be well-placed to manage any difficult situations that could arise.

Read more:

Why is saving money important for businesses?

The future success of your business depends on having enough capital to weather any financial storms, such as equipment malfunctions or losing your biggest client.

Saving also allows you to take advantage of any business opportunities that arise. You can also plan for future expenses or expansion without relying on borrowing money. And if you do need credit, having a healthy business savings account balance can help you qualify for better deals on business credit cards and business loans.

Are business savings taxed?

Business savings accounts pay interest gross, meaning before tax. Therefore, you must declare any earned interest on your annual tax return.

Sole traders can use their personal savings allowance to reduce the tax they pay on their business savings interest. The allowance permits basic-rate taxpayers to earn £1,000 a year in interest before tax, while higher-rate taxpayers can earn £500 before tax. Additional-rate taxpayers don’t have a personal savings allowance.

You must pay any tax owed on interest earned over and above your allowance to HMRC. On the other hand, limited company owners must pay corporation tax on any profits, including interest earned on business savings.