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 through credit referencing agencies such as Experian.

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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8 practical tips to separate your personal and business finances

How to separate your personal and business finances

Written by Rachel Wait, Contributing writerEdited by Lucinda O'Brien, savings expert, 20 December 2024

Fact Checked

Discover how to differentiate your business and personal spending with these eight practical tips.

Tradesman working on his laptop in his studio.

Opening a separate business bank account makes it easier to distinguish between your business and personal spending.

An essential part of running a business is staying on top of your business finances. Not only does this help when submitting your company accounts, but it also increases the likelihood of your operation succeeding.

To keep things simple, it’s important to keep your personal and business finances entirely separate. This reduces the risk of confusion and gives you a clearer picture of how your business is performing.

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Eight ways to separate your personal and business finances

Follow these eight top tips for keeping your personal and business finances separate:

1. Open separate bank accounts

As a first step, you should open a business bank account for all your business spending and expenses. Doing so makes it easier to differentiate between your business spending and your personal spending.

Even though sole traders and partnerships may be able to use a personal bank account for business purposes, there are several advantages to opening a dedicated business account. Many business bank accounts work with accountancy software, which can streamline invoicing and tax. Many also include features such as business support, which can benefit your company.

You could even consider opening multiple business bank accounts and using them for different purposes. You might have one for future tax payments, for instance, another for collecting income, and another for dealing in different currencies.

2. Track your expenses

Having a separate business bank account can assist you with tracking expenses and help you maintain a spotless financial record. But things can become more complicated if you have shared personal and business expenses.

For instance, you might use your personal car for business-related purposes, or you might run your business from home, in which case a proportion of your energy costs are for work purposes.

Because you may be able to deduct some of these business costs from your profits to reduce your tax bill, it’s crucial to keep accurate records of these expenses and keep hold of all your receipts to prevent a financial headache later on.

3. Pay yourself a salary

As a business owner, you should pay yourself a salary each month by transferring cash from your business account to your personal account. This can make it easier to stay within your budget as it prevents you from dipping into your business account whenever personal costs arise.

Businesses structured as sole traders or partnerships can set up standing orders to transfer a set amount into your personal account each month. If you’re a limited company, you must pay your salary through PAYE.

4. Get a business credit card

Applying for a business credit card makes it easier for you to track business expenses. Relying on your personal credit card for business purposes can quickly cause confusion.

A business credit card can be useful if unexpected expenses occur, and it can also enable you to build a business credit rating. In addition, you can often give business credit cards to employees to cover business expenses, which you can then easily monitor and track.

5. Get a business loan

Borrowing through a loan can give you the funds you need to help your business expand, buy new equipment and invest in new premises.

Although some lenders allow you to use a personal loan for business purposes, it’s often better to use a business loan to keep your finances separate.

If you’re operating as a limited company, borrowing through a business loan enables you to build business credit. It also means you won’t be personally liable for the loan repayments if your business can’t meet them, which isn’t the case if you take out a personal loan. By using a business loan, your personal credit score remains unaffected.

This doesn’t apply to sole traders. The law regards you and your business as a single, indivisible entity, meaning you remain personally liable for any debts. It’s a similar situation in a partnership, although in this case responsibility for the debt is split between business partners.

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6. Set a budget

Setting a strict budget for your business based on your current earnings can reduce the chances of you dipping into your personal funds whenever your business faces a shortfall. This can prevent the lines between personal and business expenditure from becoming blurred.

7. Don’t use business funds to pay for personal expenses

Just as you should avoid using personal funds to cover business shortfalls, you should resist the urge to dip into your business funds to pay for personal expenses, even if you are the sole owner of your company.

8. Seek financial advice

Finally, it can be a good idea to speak to a financial adviser or accountant. This can prevent you from making mistakes in your tax returns and accounts. It also helps ensure you’re following the rules and can even uncover new ways to manage your business finances.

Why is it important to separate personal and business finances?

It’s important to set a clear boundary between your personal and business finances to enable you to track your business’s performance and avoid any potential conflict between your personal interests and those of your business. In some cases, it can even prevent you from becoming personally responsible for your business debts.

Keeping your personal and business finances separate prevents accounts from becoming muddled. This means that when you come to file your tax return, you can find and track everything easily, speeding up the whole process and reducing the risk of making costly mistakes.