Business bank accounts for Sole Traders

A guide to applying for business banking

Opening a business bank account for a Sole Trader

Despite not being a legal requirement for a Sole Trader to open a business bank account, most accountants suggest otherwise. The benefits of a Sole Trader having a separate bank account include;


  • Keeping personal and business expenses separate, helps to streamline accounting admin.
  • Tax returns become easier, with a clear definition between taxable profits/expenses.
  • When receiving payments electronically, having a business bank account can seem more professional and reassuring to potential customers.

Comparing business banking for Sole Traders

There are many different options open to Sole Traders, when it comes to business banking, here’s how to find the most suited one for your needs. Think about your business requirements, how do you need to gain access to your account?


Do you need telephone banking, or would you prefer an app? Where will most of your transactions will take place? Do you need to pay in cash regularly? If so where is your nearest branch? Once you’ve established your requirements comparing business bank accounts for Sole Traders becomes straight forward and means you can review accounts on a like for like basis.

Cost and fees for Sole Traders opening business banking

Each bank account will have varying terms and conditions, plus associating costs and fees. When setting up a banking for a Sole Trader you should expect to pay both an administration free and a monthly account service charge.  All other transactions carry an individual fee.


When comparing business bank accounts, it’s vital that you think about how you’ll be using it regularly, as this is where most of the monthly costs will lie. For example;


  • Will you will be paying in cash on a daily basis?
  • will you be using the account to pay for things overseas?



All transactions carry costs, so rather than simply reviewing the upfront costs, try and compare the pricing structure as a whole focusing on the transactions, you’re likely to use most.


Business bank accounts for Sole Traders with adverse credit

Unlike limited companies, Sole Traders credit history is directly linked to both them and the company meaning finding business banking with poor or adverse credit can be difficult. For this reason, if you are searching for a bank account which will accept applications from Sole Traders with adverse credit history, it’s worth considering accounts without credit checks. Before applying though, it’s advisable to have a conversation to establish you fit within that particular banks criteria. They will ask the following;


  • When the adverse credit occurred
  • The outstanding amount
  • Have you repaid the debt?
  • Was there a reason for the adverse, i.e. an event such as divorce, recession etc.

Sole Trader declined for business banking

If you have been declined for business banking and require an alternative, Merchant Advice Service can help. Our partnering banks offer no credit check accounts for Sole Traders, which can be agreed within a matter of hours.


Make a quick enquiry

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