Banking at a personal level can be complicated enough, but banking as a business requires another level of understanding, especially if you’re starting out as a new business. There’s so much to think about. You have to consider the costs for staff, property, supplies and more and make sure you have ticked all the technical boxes. We all need a helping hand at times and this is one of them. With larger than normal quantities of money coming under your possession, you’ll want someone you can trust to help you take care of it. A bank becomes one of your closest friends at a time like that. You get to know your local business manager and work out a unique relationship suited to your business. We look to investigate that relationship and explore the role of banking for a business.
Features of business banking
- A separate bank account from your personal account, for keeping track of business transaction.
- Access to a business manager who can give you key targeted advice for your finances.
- Business bank accounts tend to take some time to officially open as there a number of checks that the bank needs to perform. Keep that in mind if opening the account is time-dependant.
- There are often associates charges with these accounts; standing charges for having the account or transactions fees depending on the circumstances.
- You’ll be able to pay into accounts in other countries and in other currencies for international commerce.
- Generally there are higher interest rates to give you a bigger return on your savings.
UK Business Banking Regulations
The primary source of legislation for banking in the UK comes from the Financial Services and Markets Act (FSMA) of 2000. As the UK is not set to implement any rules and regulations stemming from the Brexit agreement finalised in January 2020, many European rules still affect the UK marketplace. Some of the other notable regulations include Regulation (EU) 596/2014 on market abuse, Regulation (EU) 236/2012 on short selling and certain aspects of credit default swaps, Regulation (EU) 648/2012, Regulation (EU) 2015/2365 and Regulation (EU) 2016/1011.
The primary regulating bodies in the UK are The Bank of England, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), which are actually a subdivision of the Bank of England. In terms of what each body is responsible for; the FCA and PRA are the banking regulators and the Bank of England is the chief resolution centre. Collectively the PRA and FCA replaced the Financial Services Authority in 2013. The FCA manages conduct and the PRA are the primary prudential regulator.
From the start, a business account gives you the ability to separate your personal finances from that of your business. You’re also given a favourable selection of different companies that can offer you an account, many smaller businesses included. Most high-street banks can offer you a business account such as Barclays, Lloyd TSB or Santander. There are several other lenders out there that can give you suited accounts for you such as Acorn, Card One and Fair Everywhere. You can learn more about each of these by clicking the relevant links.
Along with being able to keep your personal and business finances separate, in general a business bank account is more professional and allows you to do business at an international level more easily.
When undertaking a business, a dedicated bank account is one of the first things you should look to get. There’s nothing more important than sorting out a revenue stream and somewhere to pay for any outgoings. It’s a stamp that you’re serious about your business and that you’re professional. Business banking is essential and a bank account is the foundation of that necessity.