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Is it time to switch your business bank account?

Most business owners open a bank account when they set up their firm, but very few take the time to consider moving their account. Often, it simply does not cross their mind to do so, which is a shame because, potentially, changing business accounts has many benefits.

Get a better deal

Most banks want as many business customers as possible. This is because these accounts make them far more money than personal accounts do.

This fact means that most banks put together great deals for new business customers. If you switch accounts, you can take advantage of offers like free overdrafts, cash payments for switching, competitive interest rates and lower or nonexistent bank charges.

Get a better package of extras

Many banks now offer free extras to their business customers. With the right bank account, it is possible to access services like free advice from a dedicated business team and free banking for several years.

Easier access to finance

Sometimes, switching accounts will give you easier access to finance. However, this is something you need to be careful about.

If you regularly need access to finance and your current bank is helpful, it’s usually a good idea to stick with that bank. Clearly, if you already have a good working relationship and can easily get access to finance, it would be wiser to maintain that bank account rather than switch.

On the other hand, if your bank always says ‘no’ to your loan applications, changing banks may help. If this is a key reason for your switching bank accounts, take the time to ask about other banks’ lending criteria and establish whether your firm meets those standards.

Preparing to move

If you do think moving is a good idea, take your time and choose carefully. Make sure that you understand the terms and conditions of the account, including any fees.

Your new bank should provide advice and support to make sure that all of your bills are paid on time. It will also explain the best way for you to tell your customers that they now need to pay you via a different account. You need to work all of this out and draw up draft letters and emails before you actually switch accounts to avoid money going astray during the switchover.

Get your books in order and set up your accounting system to handle the move. It is also a good idea to do this well in advance of the actual switch.

Posted by Peter
November 11, 2015

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