Switching your business bank account made simple

More small businesses than ever before are switching bank account, encouraged to change provider by increasing competition for their custom and moves to make the process simpler.

Starling Bank business debit card

Starling Bank is pecking away at the big banks' lunch

Changing your business bank account is easier than ever.

More small businesses than ever before are switching bank account, encouraged to change provider by increasing competition for their custom and moves to make the process simpler. Almost 18,000 small businesses changed business bank account during the second quarter of the year, according to new figures from Pay UK, the organisation that administers the Current Account Switch Service (Cass), an initiative to make it easier for consumers and small businesses to change bank. That was more than twice as many as in the same period of last year, when only 8,000 businesses changed bank using the service.

Pay UK said the increase followed a publicity campaign it ran earlier this year to make more businesses aware they are covered by the Cass, which makes banks responsible for completing account transfers. Businesses with fewer than 50 employees and an annual turnover of less than £6.5m are eligible for the service.

The battle for customers

Starling

Revolut

More traditional banking players are also keen to break into the market. For example, Co-operative Bank is attempting to woo small businesses with the promise of 30 months of free banking for firms opening its business account for the first time. The bank says it expects to double its share of accounts.Meanwhile, Nationwide Building Society, the fastest growing provider in the personal current account market, has announced it will launch its first business bank accounts in 2020. It expects to add unsecured loans, credit cards and savings accounts to its business products range.

For small businesses covered by the Cass, moving account to a new provider should be relatively straightforward, even where they have overdraft facilities or other credit arrangements in place. Larger businesses not eligible for the scheme are still entitled to switch accounts, with regulation in place to prevent banks treating those that do so disadvantageously, though they may have to do more of the switching work by themselves.

Tap into a £10m inovation fund

Innovate UK (innovateuk.ukri.org), the government-backed agency running the project, says applications will be judged on the basis of the commercial potential of the project, with a particular focus on innovation likely to result in an increase in productivity. To be eligible, businesses must have fewer than 250 employees, turnover of less than €50m and a balance sheet worth less than €43m.

The loans are available for a term of up to ten years. In the first five years, borrowers must repay 3.7% per year in interest, with a further 3.7% being accrued and deferred. The loan (including deferred interest) must then be repaid over a maximum of five years, with interest being charged at 7.4% per year on the outstanding balance.

Firms must register by 11 September and complete their applications by 18 September. They will be notified if they are successful by 1 November and must start drawing down their loans by 30 March.

Recommended

Does part of the £50bn lying forgotten in dormant accounts belong to you?
Personal finance

Does part of the £50bn lying forgotten in dormant accounts belong to you?

Around £50bn of our money is just sitting in dormant bank, savings and pension accounts. Make sure none of it's yours, says Ruth Jackson Kiry=by.
20 Apr 2021
Recovery Loan Scheme: the latest government aid package for small businesses
Small business

Recovery Loan Scheme: the latest government aid package for small businesses

The Recovery Loan Scheme will help companies weather the pandemic
16 Apr 2021
The end-of-tax-year to-do list for small businesses
Small business

The end-of-tax-year to-do list for small businesses

If you run a business, get on top of your paperwork before 2020-2021 draws to a close.
1 Apr 2021
Sunak sticks with SEISS support scheme for the self-employed
Small business

Sunak sticks with SEISS support scheme for the self-employed

The chancellor has extended the SEISS scheme to help the self-employed through pandemic-induced difficulties.
19 Mar 2021

Most Popular

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?
Bitcoin

“Joke” cryptocurrency dogecoin goes to the moon. What’s going on?

Dogecoin – a cryptocurrency created as a joke – has risen by more than 9,000% this year alone. Saloni Sardana looks at how something that began as an …
19 Apr 2021
The FTSE 100 has clawed back above 7,000 – how much higher can it go?
UK stockmarkets

The FTSE 100 has clawed back above 7,000 – how much higher can it go?

The FTSE 100 index has risen to over 7,000 for the first time in over a year – it now sits just above where it was in 1999. But its era of neglect cou…
19 Apr 2021
The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021