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Business Bank Accounts – The Lowdown

If you’re in the process of (or thinking about) starting a business, then choosing the right type of bank account for your business is essential.  If you’re already running a business and looking to switch to a different type of business account, again you’ll want to choose the type that’s best for your business.  Deciding on the right bank account can seem like quite a challenge with so many different types of bank account available nowadays.  Today we’re going to take a look at the different types of bank account so that you have the information and knowledge necessary to choose the right type for your business accounts.

Bank accounts may be scaled depending on the size of a business and for those who are just starting up or operating as a sole trader, using your personal bank account is acceptable.  However, for growing businesses using a specialised bank account is a much better option as it will allow you to separate your business and personal finances much more effectively.  When choosing an account it’s important to consider the amount of money you expect to have coming in and going out.  Some bank accounts will cap the amount of money you can deposit and transfer which means that you’ll need to fully understand how your business operates in order to choose the bank account that will enable you to handle your business requirements efficiently.

Different banks provide different types of services and fully understanding the needs of your business can aid you in choosing a business bank account based on the type of services that the bank provides.   For example, if you run a small business an account that offers fewer fees on transfers or lower costs for maintaining the account would be beneficial. 

If you’re running a larger business or actively growing your business, then it’s a good ideal to look for the type of business account which allows larger sums of money to be transferred.  You may need to transfer enough money to accommodate the requirement to pay for more staff or increase your purchase of supplies and equipment.  As a growing business, you may need to move to larger premises and need the facility to transfer larger sums.  As a larger business there will be times when you may need a larger overdraft facility or the option to take out a business loan, so make sure that you choose the type of account that will allow this in future. 

When choosing a bank account, think about the future of your business and how you envision your business to be operating over the next five years.  This will give you a closer insight into the type of business banking facilities you may need in the future so that you can choose the type of business bank account that will benefit your for several years, rather than changing the type of business bank account you use as the need arises.  Planning for the future is an essential part of business banking.