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?

Some banks may insist that you have a business current account with them before they will accept you for a loan while others, such as the government-backed Start Up Loan, will transfer the loan to a personal bank account.

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 businesses that are less than three years old can get a government Start Up Loan.

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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What Is a Business Savings Account?

What is a business savings account?

Written by Rachel Wait, Contributing writerEdited by Kyle Eaton, Small business expert, 6 September 2024

Fact Checked

Building a savings pot for your business could prove invaluable. Learn more about the different business savings accounts and how they work.

Small business owner working with a laptop computer behind the counter of a cafe.

You can open as many business savings accounts as you like to meet your different savings goals.

A business savings account works in a similar way to a personal savings account, except you use it for business purposes. You deposit money into the account and then earn interest on those funds.

You shouldn’t use a business savings account for everyday banking transactions – that’s what a business bank account is for. But you can use a business savings account to set aside money for emergencies or future growth.

Earn extra interest on your business savings.

Compare business savings accounts

What types of business savings accounts can you get?

As with personal savings accounts, you can choose from a range of different business savings accounts. And you can open as many business savings accounts as you like to meet your different savings goals and priorities.

Easy-access savings accounts

If you open an easy-access business savings account, you can pay in money as often as you like and withdraw your funds whenever you need to. This makes this type of account ideal for stashing away some cash for unexpected expenses.

Easy access accounts tend to pay variable interest rates, meaning the rate can go up or down at any time. You usually earn a lower rate of interest compared to other account types.

Fixed-term savings accounts

A fixed-term savings account is a good option if you want to lock away a lump sum for a while. You can choose from terms of between one and five years, but you can’t usually withdraw your money during this time without paying a penalty.

Because of this, you tend to earn a higher interest rate, and the longer the term, the higher the rate. You usually earn interest at a fixed rate, which means the rate won’t change.

However, before applying, check the opening deposit requirement – different providers ask for different amounts. Also, be aware you won’t usually be able to pay any more money into the account during the term.

Notice savings accounts

A notice account sits between an easy-access and a fixed-term account. You can access your money in a more timely fashion, but you must give a certain amount of notice before making a withdrawal. This is typically 30, 60, 90 or 120 days.

Notice accounts tend to pay higher rates of interest than easy access accounts – but not quite as much as a fixed-term account. This type of account can be useful if you’re putting money away to cover a bill that’s due on a set date, such as VAT.

Read more:

Can you use a personal savings account for your business?

This depends on the type of business you run. If you’re a limited company, you must keep your personal and business finances separate. This means you can’t use a personal savings account for your business expenses and must open a business savings account instead.

If you’re a sole trader, on the other hand, you might not see the need to open a separate business savings account and might be happy sticking with your personal account.

However, if it becomes difficult to distinguish between your business and personal savings, it could be time to think about opening a business savings account. This can help with tax reporting.

Benefits of a business savings account

One of the key benefits of a business savings account is that it pays interest (unlike most business bank accounts). If you have cash in a business bank account that you don’t need for making immediate payments, it makes sense to move it into a savings account and watch your savings grow.

Building up a sizeable savings pot for your business means you have something to fall back on for unexpected bills, to ease cash flow during seasonal lulls in business activity, or to invest in new equipment or personnel. It can also prevent you from turning to loans or other sources of funding that can result in high levels of debt.

Limitations of a business savings account

Although there are many benefits, business savings accounts have a number of limitations, too.

For example, if you’re opening a fixed-term savings account, you can’t typically access your money for the term of the account without paying a penalty. To avoid getting caught out, you need to be sure you can leave your funds untouched for the required time.

The same applies to notice accounts – you must provide the correct notice before making a withdrawal.

You should also watch out for:

Variable interest rates: Some accounts pay rates that can go up or down at any time. This can impact your overall earnings.
Minimum balance requirements: Check whether you need to always keep a set amount in the account. If you don’t meet this requirement, your provider could cut the interest rate or close your account.
Bonus rates: Some easy-access accounts pay a bonus rate that temporarily boosts the overall interest rate. This often lasts 12 months and then rate then drops. You may need to move your money to a more competitive account after this time.

How to choose a business savings account

The best business savings account for you depends on your savings goals and needs. Think about the following points before opening one:

Do you need to access your savings regularly? Or could you afford to lock a sum of money away for a set time?
What’s the interest rate? Is it fixed or variable? Is it competitive?
How much do you need to open the account? Can you meet this requirement, and do you need to maintain a minimum balance to keep the account open?
How is the account managed? Can you manage it online or via an app, or would you prefer to have branch access?
Do you meet the eligibility criteria? Some providers may require your business to be a specific size or have a minimum annual turnover.

FAQs

Are business savings covered by the FSCS?

Yes, the Financial Services Compensation Scheme (FSCS) covers money held in a business savings account. You can claim up to £85,000 per financial institution in the event your provider goes bust.
Find out more about how the FSCS protects business bank accounts

Do you pay tax on business savings accounts?

Yes, as business savings accounts pay interest gross (without tax deducted), you need to pay tax on the interest earned. The amount you need to pay depends on your business type.

If you’re a sole trader, you only need to pay tax on the amount you earn that’s above the tax-free personal allowance. You should state how much interest you’ve earned in your self-assessment tax return.

If you’re a limited company, you pay corporation tax, and you need to include any interest earned on business savings in your profit calculations.

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

The length of time it takes to open a business savings account depends on the provider and how quickly you supply the necessary information and documents. Your account could be up and running the same day, or it could take a couple of weeks.