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We asked Fiona Brennan, Director of B2 HR Solutions Ltd, who has over 15 years’ senior management experience at a major bank, to explain.

 What kind of support?

Before you meet to discuss your banking arrangements with any financial institution you should think about what kind of banking support your business needs. For example:
• Do you only need to pay in/out money either by cheque, cash or through the banking system (BACS) or do you need more specialised services, such as international arrangements?
• Do you need to ask for an overdraft facility or business credit card? If so, do you have a reasonable business plan that can support your application for funds?
• Do you need a business loan - if so for how much? And how much can you afford to repay each month? Do you have a reasonable business plan to support your request for funds and have you any security that may help the bank decide to lend you the money?
• Who will be allowed to withdraw funds from the account - do you want sole or joint signatures?
• How much activity do you anticipate on the account - will you be receiving lots of small payments or less frequent, larger receipts? The amount of credits and debits on an account will increase your bank charges.
• Are you looking for any ongoing specialist advice from your bank manager?  If so, then expect to pay for it.
• Do you want to hold the account in the same bank as your personal account, where they have some knowledge of you, or do you want to start afresh somewhere else?

Once you have given some consideration to these areas, you are ready to visit the banks. Take along:

·          Your Certificate of Incorporation

·          A copy of your Memorandum of Articles of Association (these will both be needed if you are looking to set up a limited company account)

·          Proof of address (always needed)

·          At least 12 months’ bank statements

·          Your business plan. 

Most banks offer three levels of service and your charges will reflect what level of service you choose:

Basic

A relatively simple account, where you pay in money to the account and write cheques from it. There’s generally no lending on these accounts. You will be given a phone number and conduct most of your business with the bank over the phone. This service has the lowest charges.

Mid-level

Again you will carry out most of your business with the bank by phone, generally with a named business banking manager whom you may see in person, on average, twice a year. Low risk lending may be allowed. This is a more expensive service than the basic one.

High-level

You will have a named business banking manager who will see you in person, as required. Generally these sorts of accounts are complex. They are of high value and therefore need the dedicated support of an experienced bank manager. The costs therefore reflect this standard of service. 

Remember, all banks have the discretion to reduce their charges. So don't be afraid to negotiate a deal when you open the account. Even if they are offering free periods, you can always ask them to extend the free period from, say, one to two years. 

And finally, shop around and go with the organisation you feel most comfortable with. But do take care if you are making decisions based on the person who deals with you initially, as they are unlikely to become your long-term contact.  

Good luck!