business bank account

How to Open a Business Bank Account in the UK: A Comprehensive Step-by-Step Guide for New Businesses

Kurt GraverBusiness Start-up Advice

Opening a business bank account is an integral first step when starting a UK company. It lets you keep your company finances organised and separate from personal funds. 

However, setting up a business account can seem complex for newcomers navigating the vast array of available account types, features, and providers.

This in-depth guide aims to walk you through the A-Z of opening a business bank account in the UK – optimised for search engines so you can easily find answers to any questions.

We’ll cover:

  • A breakdown of the step-by-step process
  • Tips for choosing the right UK bank  
  • Details on business account types  
  • Key documents needed
  • Verification and approval timelines
  • Additional advice and recommendations

By the end, you’ll have all the knowledge required to choose, apply for, and open a tailored business bank account smoothly.  

Let’s get started!

The 5 Key Steps to Opening a Business Bank Account 

While specific application requirements may vary between banks, there is a general standardised process for opening company accounts in the UK:

Step 1: Prepare Relevant Documents & Information 

Step 2: Evaluate and Select a Suitable Business Bank  

Step 3: Complete Account Opening Applications

Step 4: Submit the Application & Await Approval 

Step 5: Cooperate with Further Verifications as Needed

We’ll now explain each step in detail:

Step 1: Prepare Relevant Documents & Information

When starting a business bank account application, you need to have the following documentation and details ready to go:

Proof of ID & Address for Directors/Partners:

  • Passport / UK photo driving licence 
  • Recent utility bill/bank statement 

Business Verification Evidence: 

  • Certificate of incorporation  
  • Partnership deed
  • Annual tax return  

Business Background Information:

  • Business plan  
  • Cash flow forecasts
  • Projected annual turnover
  • Nature of company activities

Ensuring you have the correct documents and details will avoid wasting time retrieving items during the application process.

Step 2: Evaluate and Select a Suitable Business Bank 

With countless providers on the market, selecting the right bank account to meet your business needs is key and warrants careful consideration, including:  

Account Features – What functionality do you require? e.g. unlimited transactions, foreign transfers, and accounting integrations. Compare features across banks.

Fees & Charges – Monthly account fees vary considerably by provider. Assess ongoing costs against your budget.  

Eligibility Criteria – Each bank sets eligibility criteria regarding company structure, years in business, turnover requirements and director/partner background checks.

Digital vs Traditional – Challenger banks focus on speed and digital experience, whereas established banks offer local branch assistance and financial advice services. Decide what banking experience suits your needs.

Before choosing, research different business account offerings against the above criteria pertinent to your company situation. 

Step 3: Complete Account Opening Applications  

Upon selecting your chosen bank, it’s time to begin the application process by filling in all forms fully and accurately:  

Online Application – You can complete the entire application online via a secure portal for digital banks. 

Paper Application – Account opening paperwork may need to be completed in person for traditional banks with physical branches.  

Regardless of the application method, double-check all details entered, such as names, addresses and financial projections. Any inaccuracies could delay approval.

Step 4: Submit the Application & Await Approval

Once satisfied, formally submit your application via the bank’s portal/app or a branch visit. You may need to supply supporting documents, too. 

Application processing times vary significantly by bank – anywhere from 1 day to up to 6 weeks.  

If you have any initial queries, contact your bank representative for assistance. Now begins the waiting game!

Step 5: Cooperate with Further Verifications  

Under financial regulations, UK banks conduct extensive background checks on business account applicants and will require your cooperation during the verification process.

You may be asked to:

  • Explain sources of business capital/funding  
  • Provide extensive identity documents
  • Answer compliance questions   
  • Visit a branch to complete identity authentication

Responding promptly and transparently to all requests ensures a smooth verification process. Again, timeframes range significantly across banks.  

Once your bank confirms account approval – it’s time to start using your new UK business account!

How Long Does Opening a Business Bank Account Take?  

Given the verification steps involved, opening a company bank account takes longer than a personal account. But how long exactly?

Here is a comparison of approximate timescales by bank type:

Digital Banks – 1 to 5 working days

By completing ID checks digitally, online-only challenger banks can swiftly approve accounts.

Traditional Banks – Up to 6 working weeks  

Established high-street banks have longer compliance processes requiring extensive background checks, leading to slower approvals.

So, while opening an account at digital banks is significantly faster, traditional banks provide local branch and advisor access – the choice depends on your preferences. 

In any case, consider investing account opening lead times into your startup operational planning.

What Business Account Type Is Right For Me? 

While the application process remains largely similar across providers, you’ll want to select a specific account tailored to your intended business transactions and activity, including:

Business Current Account – For everyday business transactions. Tend to include more features.

Merchant Account – Used by ecommerce sites to accept customer payments securely. Integrate with payment gateways. 

Business Instant Access Savings – Hold excess funds and earn interest on longer-term account balances.

Foreign Currency Account – Useful for companies needing multi-currency transactions across global trading partners.  

Carefully assess your planned account usage, cash flow patterns and trading volumes to choose the right type to suit your needs. Many banks also allow the opening of multiple linked accounts.

Choosing the Best UK Business Bank Account  

In today’s modern age, you’re spoiled for choice when selecting a business bank account provider in the UK. So, how do you go about picking the best one? Here is a balanced scorecard approach:

  • Weigh up the pros and cons of leading high street banks vs. digital challenger banks specific to your preferences.
  • Thoroughly assess fees, features, eligibility criteria and branch access considerations as they apply to your unique company.
  • Read multiple latest customer reviews across TrustPilot, Google Reviews, etc, to gauge real account holder experiences. 
  • Shortlist 2-3 potential providers for in-depth comparisons before deciding

Researching business banking options against your company profile and operational needs ensures you find the top provider match to set your finances up for long-term success.

Summary – Your Complete Guide to Opening a UK Business Bank Account

We hope this start-to-finish walkthrough has provided extensive detail on successfully opening a tailored business bank account for your UK company–the first step to building solid financial operations. 

Here are the key steps one final time:

Step 1️ Gather Documents

Step 2️ Compare Bank Options 

Step 3️ Fill Application Forms

Step 4️ Submit Application   

Step 5️ Complete Verifications

Additionally, be sure to:  

  • Choose the right account type for your transactions 
  • Factor in application approval timelines
  • Select the bank that best serves your needs.