Business banking for people with bad credit

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Libby James
Merchant Services Expert

Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.

Opening a Business Bank Account with Adverse or Poor Credit: A User-Focused Guide

Embarking on the journey of opening a business bank account with less-than-stellar credit can feel like a daunting task. Many traditional banks may turn down your application, leaving new business owners concerned about the entire process. Here, we’ll walk you through what to anticipate when opening an account and provide insights on how to enhance your chances of a successful application.

Finding the Right Business Bank Account with Adverse Credit

Both personal and business credit ratings wield significant influence over banking decisions, sometimes impacting your options for up to six years or more. Different financial institutions assess credit history in various ways, considering factors such as when the adverse credit occurred, its amount, and the underlying reasons.

 

Know Your Credit Details: When applying for a business bank account, loans, or credit cards, it’s crucial to have your credit details at your fingertips. Be transparent about any adverse credit, including when it occurred, the amounts involved, and the reasons behind it.

 

Check Provider Criteria: Providers vary in their tolerance for adverse credit. Some may accept it to certain levels, so ensure you meet the criteria before submitting your application.



No Credit Check Business Bank Accounts

Not all providers conduct a hard credit check for business banking applications. If you or your business has a history of poor credit, explore options with providers that perform a soft credit check, avoiding any impact on your credit history. These institutions often focus on business checks, such as verifying your company’s registration with Companies House.

Applying for a Business Account with Poor Credit: Be Prepared

Preparation is key when seeking a business bank account with poor or adverse credit. Before submitting your application, gather the necessary documents and information:

 

ID and Proof of Address: Ensure you have valid identification and proof of address.

Adverse Credit Details: Be ready with details about your adverse credit, including timelines and outstanding amounts.

Previous Declines: If you’ve faced rejections elsewhere, be prepared to explain the reasons.

Before completing an online application, consider speaking to an advisor. This proactive step, especially with smaller banks, may lead to pre-approval, streamlining the process.



What adverse credit can affect a business bank account application?

Various types of adverse credit can impact business bank account applications, influencing the decisions of financial institutions. It’s essential for business owners to be aware of these factors when seeking banking services. Common types of adverse credit include:

 

County Court Judgments (CCJs): Legal judgments against a business for unpaid debts, affecting creditworthiness.

 

Debt Management Plans (DMPs): Agreements to repay debts over an extended period, signalling financial struggles.

 

Individual Voluntary Arrangements (IVAs): Formal agreements between a business and creditors to repay debts, impacting credit standing.

 

Late or Missed Payments: Delinquencies in meeting financial obligations, indicating potential financial instability.

 

Bankruptcy: A legal declaration of the inability to repay debts, which significantly affects credit and financial standing.

 

Previous Declines: Rejections from other financial institutions, raising concerns about creditworthiness.

 

Understanding the nature and impact of these adverse credit elements is crucial for businesses seeking to open bank accounts, as it allows for better preparation and increases the likelihood of a successful application.



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Business Bank Account for Bankruptcy and Terminated Accounts

While options for directors with registered bankruptcy or ongoing debt management plans may be limited, circumstances matter. For debts over six years old and personal rather than business bankruptcy, there are available options for both limited companies and sole traders.

 

If you’ve experienced terminated business banking due to recent adverse credit, don’t despair. Alternative options exist with smaller and online providers.


How Merchant Advice Service Can Assist

Merchant Advice Service collaborates with partners who specialise in assisting with business bank applications despite adverse credit. Our goal is to expedite the acceptance process, potentially having your new account live within 24 hours. To explore how we can help, speak to our experts today.

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Frequently Asked Questions

Commonly Asked Questions
Can I open a business bank account with poor credit?
Yes, some providers may accept adverse credit, so check their criteria before applying.
Do all providers conduct a hard credit check?
No, not all providers perform hard credit checks. Some may use a soft credit check and focus on business checks.
What documents do I need for a business account with poor credit?
Prepare ID, proof of address, and details of adverse credit, including timings and amounts outstanding.
Can I apply for a business account online with poor credit?
Yes, but consider speaking to an advisor before completing the forms for a smoother process.
Are there business bank account options for bankruptcy?
Limited options exist, but circumstances matter. Speak to our experts for personalised advice.
What if my business banking was terminated due to adverse credit?
Alternative options are available with smaller and online providers.
How long does it take to get a new business account with adverse credit?
With our assistance, your new account could be live in as little as 24 hours.
How can Merchant Advice Service help with adverse credit?
We work with partners to facilitate business bank applications, specialising in cases with adverse credit, speak to our experts before switching.

Conclusion

Opening a business bank account with adverse credit isn’t a dead end. While challenges exist options like no credit check accounts offer viable alternatives. 

 

Remember, each application process varies. Always check your credit report and prepare the necessary identification and financial details. Be mindful that adverse credit can stay on your record for up to 12 months or longer, affecting your ability to borrow money. However, with the right approach, including making timely monthly payments, you can improve your credit score. 

 

Explore various bank offers, including those from high street banks and online providers. Don’t let past credit agreements limit your future. With preparation and the right information, a suitable business bank account can be within your reach.


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Libby James

Libby James Co-founded Merchant Advice Service alongside David Bird in 2016. Her finance background, coupled with retail and customer service experience, gave Libby the drive to bring transparency and non-biased advice to the world of merchant services. Having come from the heavily regulated mortgage and insurance industry, Libby found it puzzling that other financial sectors lacked regulation and transparency leaving customers confused and unable to make informed decisions when it came to accepting card payments. This was soon to become Libby’s obsession!

With the help of some of the industry’s best, Libby began to research acquiring banks, complex terminology/regulation, and the problems customers experience within merchant services and payment gateway markets. She spent years on sourcing solutions for complex clients, which previously others were unable to assist with. Libby established relationships with brokers and banks which would soon form the cornerstone of Merchant Advice Service. As a result Libby has been featured in high-profile publications across the web.

Libby is proud to be the entrepreneur’s champion, supporting start-up businesses regularly. Her industry insights can often be found on LinkedIn where she provides free of charge advice and money saving pointers. It’s safe to say she has her finger on the pulse of everything card payments related.

Libby speaks of her experience in founding and running Merchant Advice Service…

‘Merchant Advice Service is one of my greatest achievements to date. We help business owners to overcome card processing issues which can become detrimental to their business. We assist SME’s in finding suitable card payments solutions, helping them create their vision. Each and every day is different, exciting and fore filling. As technology advances I can’t wait to see the way in which the merchant services market advances, and I’m pleased that our business will play a part in educating company owners along the way.’

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