Business prospects often get tarnished due to many reasons, including bad credit history. It can diminish money borrowing options; however, it doesn’t make them redundant or unavailable.
Direct lenders for very bad credit, promotional credit cards, bad credit loans, and other options always remain open. However, opening a bank account for business with such a history can prove challenging.
But a few solutions can prove useful, or aid in such circumstances. These include opting for no credit check banks, having a solid business plan, electoral roll enrollment, HMRC registration, etc.
Bank Account Opening Options for Bad Creditors
● No Credit Check Banks
A few renowned banks that don’t conduct credit checks include Tide, Acon, CardOneMoney Account and Cashplus Business Account. Additionally, a few business bank accounts include Santander startup business account, Barclays, and NatWest foundation business account.
These traditional bank accounts allow deposit, withdrawals, and provide debit card facility people suffering from bad credit history. Most business owners can avail their services even if they have gone through recent bankruptcies, defaults, CCJ orders, etc.
Fortunately, business with poor credit history won’t get rejected for opening a current account with such banks. However, owners with bad credit can face issues or even get dismissed while passing a cheque for a business account opening.
Therefore, ideally, the director should have a good credit rating to avoid such situations. Moreover, regular invoice payments and clearing manageable debts can improve the rating. It can help both partners to open a joint account. Until then, a single director can pass the cheque.
● Build a Business Plan
Traditional banks still have business advisors that make the final current account opening calls. The advisors may disregard the candidate’s poor credit history if they think that the business has a solid plan with financial projections, and projects.
Building a business plan doesn’t require much effort as the templates remain available online. Also, entrepreneurs, startups, and other companies can refer to the proposal’s necessary documents on the UK government website.
The details would also help the owners, directors, and new bank directors understand all the financial information. The latter would hold the final decision, and therefore, it is necessary to build a solid business plan with careful estimations.
● Conduct a Credit History Check
Many business owners proceed with the business plan and financial documents before checking their credit history. It is one of the most common mistakes that lead to rejection. However, conducting a credit history check can avoid such a situation.
Moreover, it can help to potential flag issues. Business owners and directors should take it as a necessary step and do it for their personal accounts. A few websites even provide £2 cashback for conducting credit checks of Equifax and Experian’s Credit Expert.
The business account applicants must check details like CCJs, defaults, bankruptcies, home addresses, name, DOB, financial accounts, etc. Manage outstanding debts and rectify details before submitting the account opening application for the business.
Make sure to copy the bank details in the exact format on the account opening applicant to avoid rejection. Under account, correction disputes place of notice correction in the account application.
● Enrol in the Electoral Roll
Electoral roll updation happen during the Spring and Autumn season. Also, without enrollment, banks can reject account opening applications for businesses. Therefore, without delay, make sure to enrol in the electoral roll.
The current business address should match the details in the electoral roll data. Moreover, it takes almost two months for data updation in the system. Therefore, company owners must take faster actions for enrollment signup.
But don’t go for open or edited signup to fill the business email with marketing content from the registered companies.
● HMRC Registration
According to the current tax rules, all UK companies must register with HMRC. The organization owners must take action in under three trading months. Banks might not conduct credit checks; however, they mostly check for HMRC registration.
Any bank can reject an account opening application of business owners if they don’t find the UK government website’s details. Therefore, it is essential to complete the HMRC registration simultaneously with the enrollment in the electoral roll.
● Challenger Banks
TSB, Metro Bank, and Virgin Money are a few Challenger Banks. The term “Challenge Banks” is given to mobile banks that “challenge” Barclays, Lloyds Banking Group, HSBC and the NatWest Group. The latter are the four largest banks in Britain.
Small businesses, entrepreneurs, and startups can easily open accounts through Challenger Banks. Bad creditors receive many account opening options, go through a quick application process, and open accounts in minutes.
If your application gets rejected with a Challenger Bank, you can apply with another one. However, we would advise you to go through the rejection details before proceeding and make improvements as much as possible.
Entrepreneurs, startups, and small business owners can open a current account with banks that accept bad creditors and don’t conduct credit checks. Moreover, self-checking personal credit history can help to avoid errors that might reject account opening applications.
Owners can enrol in the electoral roll, opt for Challenger Banks, register with HMRC, and build a business plan for a quick approval. Also, improve the credit history ratings as much as possible for faster account approvals.
Business owners can open a bank account even with bad credit. It is possible by submitting a business plan, opting for no credit check accounts, going to traditional banks, etc.