Best Business Accounts For Franchisees
Bank accounts for businesses manage finances across an organisation, tracking the cash balance, debts and payroll.
You aren’t legally bound to create a business bank account – especially if you operate as a sole trader. However, if you’re the owner of a limited company, you will need a dedicated current account in place.
With a franchise, things are a little different.
Often, you need a loan to buy-in to the organisation you’re hoping to represent. The banks who offer these loans will occasionally give a better rate based on the security of the franchise model.
This highlights the potential benefit of choosing the franchising route, but it also raises the question of which banks do business accounts for franchisees?
So, if you’re wondering what the best business accounts UK-wide are for franchisees, look no further. Here, we break down why you need bank accounts for business and who offers the best rates.
Why Do I Need A Business Account?
Simplifying finances tends to be a franchisee’s number one concern when deciding between the best banks for business accounts. It gives you the ability to determine all the business income you’ve accrued and easily deduct expenses.
Tax plays a considerable role here, and being able to easily identify the amount of tax you’ll need to pay without relying heavily on an accountant helps narrow down the list of best business accounts in the UK.
Ultimately, it’s better for your compliance. When you calculate profit, tax rules allow for expenses to be deducted from that income – and business accounts identify these expenses.
You’ll be able to start building your business’ credit rating too. If you wanted access to finance later in your career, you may find it more difficult to persuade a bank to lend to you unless you have a history with them.
Finally, your bank will have a more relevant understanding of your income and can offer expertise. This can help you identify opportunities in the market that support business growth.
What Are The Top Banks For Business Accounts?
Want an overview of the top banks for business accounts? It’s always worth doing your own research, but we’ve provided a few of the best banks for business accounts below:
- Santander – No monthly fee for the first 18 months with 0.1% AER interest on in-credit balances. Santander is perfect for day-to-day banking and includes free text and email account alerts. It also comes with a planned £500-£25,000 overdraft, subject to acceptance.
- HSBC – 0% AER interest on in-credit balances and, again, no monthly fee for the first 18 months. HSBC is a strong competitor to Santander with its free business banking and accessible online application. However, they will not provide free banking to a business with an annual turnover above £2,000,000 and overdrafts are only described as negotiable.
- Cashplus – 0% AER interest on in-credit balances, no monthly fee and no credit check. Cashplus offers franchisees the opportunity to open an account within five minutes. The catch? After 10 transfers, a monthly outbound transfer will cost £0.99 and you can’t access an overdraft until invited.
Still wondering which banks do business accounts? There are a number of other options available, however each may have certain criteria you’ll need to meet before qualifying for any perks or benefits.
Which Bank Accounts For Business Are Best For A Franchise?
Truthfully, this can depend on the franchise you’re looking to join. Some franchisors will have relationships with certain banks and will use their proven success to provide better rates.
HSBC, for example, has had a franchise team for more than 30 years and work with the British Franchise Association. They also provide an overdraft (although not specified at the offset) to all businesses.
If you’re starting out as a prospect franchisee and will need to invest a considerable sum into the organisation, you need a bank that has familiarity with the industry.
Ultimately, you also need to keep your overall franchise costs down. This is your moment to escape the rat race, and you should put as much energy into choosing your bank as you do your franchise.
The model that your franchise operates on will vary from organisation to organisation. So, provided they tick the box of understanding the industry, narrow them down further with specifics such as any interest rates they employ and the ease with which you can switch to another business account.
This is the most important factor when deciding on the best business accounts UK-wide: knowing how much they tailor to your specific needs.
Do you require a large buy-in? Do you predict a slow start in your franchise journey? You want a business account that offers bespoke support to you.
At Rainbow, we put you in contact with banks that can help your franchise business succeed. We’re just as invested in your new venture as you are, and we believe that sustainable growth requires specific financial support. Want to speak to a member of our team about our opportunities? Request a callback today.