A poor credit history can have an impact on opening a business bank account. Fortunately, there are some banking providers who specialise in business accounts for those with bad credit or don’t conduct credit checks at all.
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This business account from Revolut comes with four different pricing plans, each offering different features, depending on how big your business is and how much you use the account. There are no credit checks for opening the account, so it's worth considering if your business has yet to build up a credit history. Some of the account's top features include the ability to integrate with accounting software such as Xero and Quickbooks, smart invoicing, virtual and prepaid cards that can be handed out to colleagues, and multi currency accounts that allow you to exchange money in more than 30 currencies. Users can also manage their team's expenses in one place and allocate different account permissions for different team members. You'll also have an allocated number of free international payments depending on the payment plan you're on. Note that you cannot deposit cash into the account.
Pros
Flexible account options
Mobile app with lots of good features
Ability to issue cards to all employees
Easy to apply
Freeze card if lost or stolen
Safe and secure
Free purchases
Cons
Basic account does not include many free transactions
Get £150 cashback when you open a Tide business bank account using the code 150BOOST.
Tide is a fintech app that offers business accounts to small businesses and freelancers, hoping to relieve some of the financial stress that comes with a growing company. One of the ways it does this is to help new businesses register their limited company and open an account all in one go. Tide also stands out for the number of accountancy software packages it can integrate with, giving you more choices to find one that suits your business needs.
Pros
24/7 customer support
Categorised spending
FCA regulated
Quick set-up
No monthly fees
Easy to manage accounts and track payments within the app
Ability to set up direct debits and standing orders
No annual or monthly fee when you apply using the Finder link.
Opening a business bank account with bad credit can be complicated. Most banks carry out a credit check when you submit your application and reject it if you don’t meet the requirements. All is not lost, though! Some companies, like Zempler, offer banking services perfect for businesses with poor or no credit history. There are no credit checks when you apply. The only thing that needs to be verified is your contact details.
Pros
Open an account in 5 minutes
"Cashplus iDraft" once eligible
Currency cards for travel
Online services in addition to the mobile app
Cons
Charge to have your bank card issued
Traditional bank still needed for majority of your business finance needs
No monthly account fee for the first three months.
This business account from Card One Money is designed for small businesses and offers a speedy online application process. No credit check is required so it's a good option if your business has a limited credit history. The account can be managed via the app or online and you can also phone the call centre for assistance if required. There is a fairly hefty application fee to pay and you will be charged a monthly account fee on top. However, in return, you'll be able to send instant domestic payments, as well as international payments in a range of currencies. You'll also be able to order cards for up to four other people within your business and assign different levels of access depending on their roles and responsibilities. You can pay in cash and cheques at any Barclays branch.
Pros
Quick application process
No credit check required
Cashback rewards available on the associated Mastercard
No failed payment fees
Cons
Quite a few charges involved compared to some other business accounts, including the £55 application fee, £12.50 monthly account fee and various other transaction fees
One of the biggest benefits of the Monese business account is that it's easy to open. Provided you are a UK business, you can open an account without proof of address and without the need to run a full credit check, making it ideal for those with poor credit scores or no credit history. The account, which charges a monthly fee, is operated via the app, making it easy to keep on top of your spending. It's also packed full of useful features such as the ability to set up different savings pots, advanced security, and a debit card that can be used online, in-store or at ATMs worldwide. What's more, users can easily create invoices in the app and send money internationally to more than 30 different countries. Incoming international transfers are free of charge. Cash can also be paid into the account at any Post Office branch or at PayPoints.
Pros
Supported in 14 different languages
Quick and easy to set up
Budget management features offered in the app and savings pot feature
Deposit cash into the accounts through post offices and paypoints (with a small fee)
Cons
Only available to businesses registered in the UK
Must have a personal monese account to get a business one
Still require a traditional account for most of your banking needs
One of the biggest draws of this business account from ANNA is that you can open it in less than 10 minutes. There's no credit check to worry about, making it a good option for those with bad credit, and all you will need to provide is proof of ID, your email address and some details about your company. There are three different pricing plans available, including a free option, and the amount you pay will depend on your monthly turnover and business type. If you don't use your account one month, you won't pay the monthly fee. Depending on the plan you have, you can benefit from unlimited debit cards on the account, a set number of free transactions, multiple user access and free ATM withdrawals. Further benefits include the opportunity to earn cashback on purchases, instant payment notifications and the ability to create and manage invoices.
Pros
24/7 support
Fast set-up
Invoice and expense services within the app
Ability to connect other provider accounts to the ANNA app through Open banking
Cons
No credit or overdrafts available
Still require a traditional bank account for majority of your business financial needs
If you apply for a business account with Monzo, only a soft credit check will be carried out at application. This won't affect your credit history, making it a good option if you have poor credit or have yet to build a business credit score. There are 2 pricing plans to choose from with Monzo, one of which is free. Both plans come with a business debit card, 24/7 customer support, free UK bank transfers and savings pots to separate money. You'll also get instant spending notifications through the app and be able to budget and categorise spending.
Pros
Fee-free spending abroad.
Custom payment links.
Pots to separate money.
FSCS protected.
Cons
No branches.
Charge to deposit cash.
Accounting software only available with Pro account.
The Mettle business account is designed for sole traders and limited companies with up to 2 owners. There's no monthly fee for the account and your business won't have to undergo a full credit check when you apply. Only a soft check is carried out which won't impact your credit score. Features of the account include customisable invoices, the option to sync with accounting software, scheduled payments and savings pots. The account will also help you to automatically save for your tax bill, making business life a bit easier. Mettle is part of the NatWest Group.
Can I open a business bank account with bad credit?
The answer is yes. If you have a poor credit history then it’s likely you’ll find it more difficult to gain access to some financial services, including a business bank account, but it is possible to open one.
You may have a bad credit score for a number of reasons, including missing payments on any bills you owe, or defaulting on mortgage, loan or credit card repayments. Your score will also be badly hit if you’ve been declared bankrupt or have had a county court judgement (CCJ) made against you or your business.
But there are measures you can take to increase your chances of being approved for a business account if you have bad credit, as well as some providers who offer business accounts without conducting a credit check (more on both of these things below).
How to prepare for a business account application
To give yourself a better chance of being accepted for a business bank account, you can take several steps to improve your credit score:
1. Make sure you’re registered on the electoral roll. 2. Check your credit report to ensure there are no mistakes on it. 3. Pay back any credit you owe on time. 4. Pay off as much as you can on any existing loans and credit cards. 5. Don’t make too many credit applications in one go. 6. Don’t apply for credit again immediately after being rejected.
How do I open a business account?
You’ll need to choose a banking provider to go with and apply to them individually (although don’t make lots of applications at the same time, as multiple rejections will further harm your credit score). Each bank will have its own process (many are online) for opening a business account and will require different documentation, including things such as your personal details, ID verification and the name of your business.
Some providers may also go further, conducting credit checks and asking you additional information about your business and its finances.
It might be worth approaching your current banking provider first (a bank that you have other financial products with, such as a personal current account or credit card). If you’ve used any existing accounts sensibly, your bank will be able to see this and take it into account when looking at your new application.
If you have a bad credit history, another outcome here is that your provider may offer you a basic version of a bank account first, to get you started on rebuilding your credit score. You can then look into moving to a full business account at a later date.
For more information on the range of business accounts that exist in the UK, visit our business banking section.
Is it possible to open a business account without a credit check?
Yes, it is possible to open a business bank account without a credit check. Examples of providers that offer this are Zempler and Card One Money. The process is usually fairly quick, with approved accounts opened in anywhere from a few minutes to a few hours.
This type of banking provider will still require some contact details from you and will check that your business is registered, but they won’t conduct a credit check.
However, do bear in mind that business accounts which target banking customers with a poor credit history do often come with higher fees than some of the other business accounts on the market.
What about business accounts for bad credit at mainstream banks?
If you have a poor credit history, it’s likely to be more difficult to get a business account with a traditional high street bank, as they don’t tend to offer business accounts that cater for people with bad credit.
There’s a raft of new digital-only business account providers in the UK now, who don’t conduct credit checks when you apply. So it’s worth looking at those as an alternative to the big banks (although be sure to do your research on any account fees that are involved).
What can I do if I have been refused a business account?
If you’ve been refused a business account, it’s worth re-visiting your preparations to make sure you have all your finances and documentation in order. This includes making sure your business is registered, that you personally are on the electoral roll and that you’ve done all you can to improve your credit score. As mentioned above, if you haven’t already, you could consider approaching your existing bank to open a business account.
There’s also the option of going to a business account provider that doesn’t carry out credit checks at all, but be aware that the fees associated with these accounts are among the least competitive out there.
How to get your credit back on track
If you have a poor credit history, the good news is there are plenty of steps you can take to get your credit back on track.
Having a well-presented, thorough business plan will help to show lenders you’re serious about your business, have a good understanding of the financials and know where you want to take the business in the future. It should include an explanation of what your business does, financial projections and an overview of the market as a whole.
This step is particularly important if you’re opening an account with a high street bank as many will require you to have an appointment with a business adviser. If you’re opening an account with a digital bank, you’re unlikely to need a business plan, but having one can still help you and your business.
The next step is to check your credit report as this will enable you to fix any issues before you apply for a bank account. If you spot any mistakes, such as an incorrect address or outstanding debt that you’ve since paid off, contact the credit reference agency as soon as possible and ask them to correct the error.
If you are unable to get a mistake fixed, you can add a Notice of Correction to explain what happened. This should be no more than 200 words but could be useful if you missed a payment due to ill health, for example.
It’s also a good idea to check how your address is listed on your report and make sure you copy this format whenever you apply for credit. It might seem minor, but even little things like this can cause problems.
It’s also important to check that you are listed on the electoral roll at your current address. Lenders use the electoral roll to verify your identity which can have a positive effect on your credit score.
Your credit utilisation ratio is how much of your available credit limit you’re using and the lower it is, the better, and the more attractive you’ll be to lenders. As a rule of thumb, it’s best to keep your credit utilisation ratio below 30%.
To do this, try to pay off some or all of your outstanding balances on credit cards, store cards or an overdraft at least three months before applying for a bank account.
Under current tax rules, you must register with HMRC within three months of trading. It’s also best to do this before you apply for a business bank account. If you don’t, there is a chance your application could be rejected, even if you’re applying for an account with guaranteed acceptance.
Pros and cons of business bank accounts for bad credit
Pros
Allows you to bypass a credit check.
Can be a quick process.
Can help to improve your credit score.
Cons
Must apply individually to protect credit score.
May be a basic account at first.
May come with higher fees.
Harder to secure with traditional high street banks.
Bottom line
It is possible to open a business account with bad credit, even though it won’t be as easy a task as if you had a good credit history. There are new financial providers (mainly digital-based), who specialise in offering these type of accounts and try to make the application process as seamless as possible. However, it’s still important to compare the account features and the fees involved, to make sure what you sign up for is the right business banking solution for your business.
Matthew Boyle, Finder’s banking publisher, says: “It’s great that there is now a raft of relatively new digital banking providers who specialise in operating business accounts for people with bad credit. But as our guide also explains, there are measures you can take to improve your credit rating, so it’s worth starting to take those steps while you research which is the best business account for you to open.”
Frequently asked questions
Yes, if you choose a provider that doesn’t run a full credit check when you apply. Many digital-only providers only run soft searches which means you can still apply for an account if you have bad credit.
No, even if your provider doesn’t run a credit check, you will still need to meet the eligibility criteria to qualify.
That depends. If you’re a sole trader, your business is not legally separate from you which means business bank accounts with an overdraft will appear on your personal credit record. However, if you are a limited company, your business is treated as a separate legal and financial entity so your business accounts will show up on your business credit report rather than your personal one.
A soft credit check, or soft search, is a search on your credit file that won’t affect your credit score. Although a soft credit check will still be recorded on your credit report, it won’t leave a mark for other lenders to see, so it won’t affect your ability to get credit.
In comparison, a hard credit check, or full credit check, will leave a mark on your credit file which is visible to other lenders. Hard checks can have an impact on your credit score and lots of searches in a short space of time can make you look desperate for credit. This can reduce the chances of your application getting accepted.
One of the biggest advantages of applying for a business account with a digital-only bank is that a number of them won’t conduct full credit searches. This means that if you have poor credit, or your business simply hasn’t built up a credit history yet, a digital-only bank can provide an alternative to the big high street banks.
Digital-only banks also have many other advantages over high street banks. For a start, the application process is usually easy and straightforward, and often your account will be up and running the same day you apply. Digital-only accounts also tend to offer more innovative features compared to high street business bank accounts. For example, your account might link to accounting software or you might have access to budgeting tools.
However, bear in mind that because many digital-only banks don’t carry out credit checks, this means they also won’t offer an overdraft. In comparison, most high street business bank accounts will offer credit products such as an overdraft and business credit card.
It is impossible to answer this question for a number of reasons.
First off, different bank account providers will have different limits when it comes to accepting applicants with low business credit scores. Also, these banks have a choice of different credit reference agencies using different algorithms to measure your score.
On top of that, your credit score is only one factor used to determine your eligibility for a business bank account. If your business scores well for other eligibility criteria, a bank may be more willing to overlook a poor credit score.
Banking scores
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
Finder scores, in blue, are based on our expert analysis. We also show reviews from users, where we've received more than 10, with a score in yellow. We gather more reviews from customers every year in Finder's customer satisfaction survey.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
Michelle Stevens is a deputy editor at Finder, specialising in banking, credit, loans and mortgages. She has a journalism degree from the University of Sheffield and has been a journalist for 15 years, writing on topics including fintech, payment systems and retail. In her spare time, Michelle likes to travel, explore new foodie experiences and attempt to improve her own culinary skills. See full bio
Michelle's expertise
Michelle has written 127 Finder guides across topics including:
By switching your business bank account, you may be able to reduce your monthly fees or take advantage of different features like smart bookkeeping tools.
Considering a Revolut Business account? We take a closer look at the features and price plans available with these digital-only accounts.
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