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.
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
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.