Business or personal? Make sure you’re using the right type of account
The benefits of keeping your business and personal finances separate.
There are lots of reasons why you could be using a personal account for business transactions. Maybe your side-hustle grew into a full-time business, and you haven’t had a chance to pause for breath. Or you started using your personal account without really thinking about how your business might change.
But, to put it simply, if you run a business, you should be using a business bank account.
Using a personal account for business is in breach of our terms and conditions.
And there are lots of ways you can benefit from switching to a business account.
Be more efficient
With a business account you can:
- keep your business income and expenditure separate from personal
- quickly provide information to your bank when you’re applying for credit
- find the right information easily for HMRC to calculate your accurate tax bill.
Build a business credit profile
Using a business account can give you a better chance of being accepted for credit. You might need credit to help manage and grow your business. A business account will help you:
- provide consistent and transparent information about your trading history
- show you have a legally trading business
- show how promptly you make payments for services
- show how well you manage your business finances.
Budgeting and forecasting
Having a grasp of cash flow is important when running a business. And it’s not as difficult to do as it might seem.
Having a business account can make it easier to spot trends in your income and spending. It’ll show you:
- how quickly your customers are paying their invoices. In 2023, SMEs (Small and Medium-sized Enterprises) were owed on average an estimated £22,000 in late payments
- if your income and expenditure changes seasonally. This’ll help you plan for times when there might be more money going out of the business than coming in
- when you might need some financial support through a loan, overdraft or credit card.
We offer overdrafts for short-term financing.
Our Business Cashback Credit Card is a flexible way to manage business spending and keep your cashflow moving.
Be more credible
Portraying a professional image is one way you can get ahead of your competitors. It’ll also give your customers confidence in you. A business account means:
- customers will have the confidence they’re paying a real business for goods and services. This is especially important with the rise of fraud and scams
- you can offer your customers a range of ways to pay by linking merchant services to your account
- you might be eligible for other forms of financial support for your business such as grants. They’ll normally only be paid into a business account.
British Business Bank are independent experts in small business finance. They can offer you impartial guidance.
Get the right support at the right time
This one’s obvious. If you have a business account, we’ll know you run a business. And this means:
- you can talk to a Business Banking Manager about your business. They can’t give you advice. But they can talk through possible product solutions. Or signpost you to other groups that could help you
- you could get the right type of help when you need it most. We’ll make you aware of the range of support we can offer you and your business
- you’re best prepared for when the unexpected happens and you need financial help or advice
- we can connect you with our partners to provide further support for your business.
BrightHR can provide you with expert HR support.
AXA offers a choice of insurance products and services to help protect your business.
Bionic can help you to cut your business energy, broadband and phone costs.
Next steps
Lending is subject to status and checks.