Although changing your bank is still not as easy as changing the channel on your TV, requirements laid down by the government should make it just that bit simpler to move your account down the high street if you feel your bank isn’t up to scratch.
But why would you want to go through the hassle of changing banks in the first place? Well, research has shown that the majority of small businesses are not happy with the level of service and charges offered by their banks.
This is despite rules introduced at the start of 2003, which demanded that banks pay interest on business accounts and generally give entrepreneurs a better deal than the ‘join us and we’ll charge you for everything you want to do’ agreement that previously existed.
Maybe you have seen a loan at a better rate of interest at another bank, maybe they offer services such as internet banking and free transactions, or maybe you are just fed up with your current bank and want a change. Whatever your reason, don’t feel any misplaced loyalty towards your bank – look around to find the best deal for your business and make the switch.
What should I be looking for?
Almost all UK banks fall over themselves to stress how small business-friendly their accounts are, but it is vital that you spend the time comparing what’s offered by each bank, down to the nuts and bolts of charges and interest. Savings here will aid your company in the long-run.
“Business banking is becoming ever more competitive,” a spokesman for the British Banking Association (BBA) said. “Many banks have attractive offers for small business customer, particularly those just starting up.
“We would encourage people to shop around for the best deal – but be sure to compare like with like.”
When considering the merits of a new bank, make sure they don’t make the same failures as your current one. Of course, you cannot measure customer service until you actually sign up, but if you were irritated by, say, the poor internet banking of your old bank, it’s well worth checking out whether your new provider will do any better.
Things to consider when researching your new bank:
What rate of interest is paid and how does this compare with your current bank?
What overdraft limits will be set on your account? How much will you be charged for going into the red?
What loans are on offer? What does the small print say?
Do you get free access to your money from other banks’ cash machines?
Similarly, how much do transactions cost – some banks offer a set amount free each month, find out what deal your new bank provides.
How many branches are close to your business? What opening times do they have? Are they big enough to accommodate your needs?
If you are in a remote location, what agreements does your new bank have with other banks and Post Offices? You may be able to pay bills and withdraw and deposit cash without actually entering your own bank.
What schemes and agreements does the bank sign up to? Is it fully regulated by the financial ombudsman to assist you if you have a complaint?
What is the internet banking service like? Is it easy to access and can you transfer money and view your account hassle-free?
Will you be talking to a machine or listening to Elvis while continually on hold when you try to call your branch? Speaking to a human can speed up things considerably – try calling a potential new bank to find out how long you have to wait.