High street bank NatWest announced yesterday the introduction of free banking for start-ups, in a bid to encourage more budding entrepreneurs to turn their ideas into actual businesses.
In addition, the bank is introducing 500 extra business managers across its network of UK branches.
According to research by NatWest, 42% of potential entrepreneurs cited financial worries as the main reason for not turning their idea into a business.
Managing cashflow (33%) and a lack of funding (27%) were said to be the biggest challenges to setting up a company, followed by sales and marketing (15%) and red tape, regulation and tax (12%).
“Research shows that simply not knowing where to start puts a third of people off implementing their business idea,” said Steve Pateman, managing director of NatWest business banking.
“We know that turning an idea into a successful, growing business is one of the hardest things to achieve and requires help in many ways, not just financial.”
The Forum of Private Business (FPB) welcomed the decision to offer free business banking to start-ups.
“The early stages of a company’s life are spent trying to keep costs to a minimum, and not having to worry about the cost of transactions or your overdraft can leave you free to concentrate on other matters,” Matt Hardman, FPB campaigns manager, told Startups.
“It is possible now to negotiate with some banks in order to secure free banking when you are starting up but hopefully this move by NatWest will encourage the other bigger banks to introduce it as a standard for new business accounts.”
The start-up account is aimed at businesses that have been trading less than a year. The bank will waive charges for payments in and out of the account for the first two years.
The new offer also includes a £500 fee-free overdraft and credit card for the first year of trading, as well as a 24-hour support line.
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