Business bank accounts

[iva100]

I have been in an iva for 18 months now and am finding everything ok.

However, i am in a position where i need to go self employed but have found it impossible to get a business bank account.

I have spoken to natwest re: their foundation account but was told" this account is for people with bad credit and not offered to people in an iva"

Im finding this impossible as i have existing clients but must have a limited company and need a business account with cheques.

I find the banks attitude to giving people bank accounts rediculous, i dont want to borrow money dont want an overdraft just simply want an account.

[MelanieGiles]

Do you really need a separate business account? Or could you trade your business through your personal account, and just keep the money separate from the personal side?

[iva100]

No, due to the nature of the work and clients demands they can't trade with me unless im limited therefore i need a business account.

I think my only alternative would be to set the company up in my partners name.

As the work is high profile and under scrutiny the main contractor stipulates limited companies only.

The work will only last 6 months but 6 months is 6 months and i need the work.

[MelanieGiles]

There should be no problem in setting up the company in your partner's name, but do disclose this to your IP so they are in the loop.

[Michael Peoples]

If you are opening an account in the name of a limited company it should not be an issue that you are in an IVA as you and the limited company are completely separate entities. You would only be a signatory on the checkbook and if the company is not seeking any facilities there would be no need for personal guarantees and thus no need for credit checks on the directors.If the bank insists on credit checks you can have your partner as director.

Speak to your IP because from an IVA point of view it matters more who the shareholders are and how the profits are distributed rather than whether or not you are a director.

[MelanieGiles]

Banks still run very thorough credit checks over here for new limited company accounts Michael, and this is possibly where the problem lies.

[Michael Peoples]

That's a pity. Maybe his partner as director is the best option and should solve most problems as if he is only an employee there should ne be no reason to carry out checks on him.

[MarkL]

I can help on this one - I was in exactly the same position as you, rejected by two banks. The only two that will offer business current accounts to IVA's are Barclays and the Co-Op. Alternatively, if those two reject you, you can go to The Halifax and ask for a Treasurer's account. Nobody's EVER heard of it in-branch, but it's a very basic passbook cash-only account. However, there's NO credit check whatsoever, so it might be your only option. Good luck! Mark

[Michael Peoples]

Nice to know that Mark and thank you. We do quite a few self employed IVAs so this information will be invaluable. I will pass it on to my colleagues.

[paulgm_2000]

Hi,

I had a very similar problem recently. I had tried to open a new business account during my IVA and tried everywhere.

Natwest have a foundation account which was setup for me people like me apparently but they still refused me. I wanted no credit or even a cheque book and wanted to give them my money and they still said no!

Halifax treasurers account is useless and I kept getting up sold to the business acount even though i knew i would be refused they said 'we'll try it anyway'. I spent so long waiting for them I gave up.

In despiration I also tried an Islamic bank and a Christian bank. All said no.

Rather than try and open an account in someone elses name and make them the director(I think this is bordering on illegal anyway!) I took one last shot at Royal Bank of Scotland.

They are the most helpful bank I have ever been to. The application took a few days, I was in constant contact with the business manager and account was opened in about a week.

*IMPORTANT* They originally said that the application was refused as their system said i was bankrupt. I said I could prove i wasn;t and gave them a copy of my credit report. Their system flags up that an IVA is insolvency and linked it to bankruptcy for some reason!

So stick to you guns if you have a problem with them.

I got a Solo card(better than an Electron card) so I can use it like a debit card almost everywhere. Also go a company cheque book and their service is better than most.

If I got accepted then anyone can [:)]

[kallis3]

RBS/Natwest always class IVA and BR the same, as do some mortgage companies.

As long as you can get them to differentiate, then you may be ok.

[MarkL]

For those of you who are having problems now that Halifax have withdrawn their Treasurer's Account, I thought I'd just post an update. My Cash Plus do a pre-paid credit card that fronts a business bank account with sort code. It costs £50, but that's peanuts if your business is at stake. Two problems though: they don't allow you to cash cheques (BACS transfers only), and only allow 20 outgoing payments per month (I have 3 per day on average). Also, they seem to have problems when you hit £5,000 per month going through the account, so it's only really suitable for one-man bands. I have just successfully opened an account with Metro bank, called the Business Instant Deposit Account. That at least enables me to clear incoming payments from large commercial organisations that insist on paying out to the business name.

I'm just putting this 'out there' in case there are any business owners facing this increasingly difficult position - I have a consulting business with two employees, and turn over £15k per month, and the whole company was about to go to the wall with the loss of 3 jobs, simply because I couldn't get a bank account. What utter madness by the banks - the Co-Op's latest move only adds fuel to the fire.

[UpToMyNeckInIt]

Hi MarkL, I'm self-employed (limited company), as well. That's really useful information about Metro Bank - might give them a go myself. I'm currently with HSBC Business (account opened prior to IVA), but worried as I understand that they don't like us IVA people, and close accounts with little notice when/if they find out.

[Niobe]

Problem with Metro Bank is that they're not available nationwide as far as I'm aware.

[MarkL]

I totally agree - I'm just posting this for people who are desperately looking for a lifeline. At one point, I thought the Bath Building Society would offer me a basic cash saver account, so I was contemplating driving down to Bath for the day with all my company registration documents to open the account - after all, the alternative was for the business to fail, 3 people to lose their jobs, and my IVA to fail. I then found out that their savings account required you to open a current account with them first, so that was a no-goer. Same with the Beverly Building Society - and yes, I would have quite happily driven to Hull!

So if you're in this sort of position, you might find the information useful. We IVA'ers have to look out for each other, after all! Oh, and UpToMyNeckInIt, HSBC will find you eventually - Halifax closed my Treasurer's account down; I got away with it for 4 years, but they got me in the end. And when you get that dreaded letter and realise your business only has 60 days before it gets shut down, it pays to have options. I just pray that Citibank don't do the same thing - I'm running my current account facilities with them, but they have a rule about not using it for business use. Honestly, I feel like a b***** refugee at the moment.

Just a rant here - the idea of an IVA is that you can continue to run your business, but if you can't open a bank account, or take out Professional Indemnity insurance, how the hell are we supposed to? Anyway, rant over, but my local MP happens to be Vince Cable, who's no friend of the banks, so I've a good mind to let him know what's going on here. For whatever good that'll do.