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How to get a business bank account with bad credit
Find out how to open a business bank account with bad credit and increase your chances of being approved.
Poor credit can make it more difficult to open a business bank account, but it’s not impossible.
Some banks and specialist providers cater for those with lower credit scores, although these accounts may come with fewer features or higher account fees.
Here’s what you need to know.
At a glance
You can still get a business bank account with bad credit, but you may have fewer providers to choose from
Not all providers carry out full credit checks when you apply for a business account
Business bank accounts for those with bad credit tend to come with higher fees and fewer features
It’s worth taking steps to improve your credit score before you apply for a business bank account
Find the right bank account for your business
Can I get a business bank account with bad credit?
Yes, it’s possible to get a business bank account if you have a low credit score, but you might not qualify for the most competitive accounts available.
Having bad credit suggests to banks and other providers that you’ve had problems managing your finances in the past, meaning they could be more reluctant to offer you a business account as a result.
However, while some banks carry out a full credit check before deciding whether to accept your application, some digital-only banks don't. Examples include:
Tide
Zempler Bank
Card One Money
This means they don’t offer credit facilities such as business overdrafts, but they can be a good option if you’re struggling to get a business account elsewhere.
How to get a business bank account with bad credit
The key to getting a business bank account with bad credit is to shop around and compare what’s available.
Look for providers that don’t carry out a hard credit check on application and see what they offer.
As part of your comparison, consider the following:
Eligibility criteria
Specific eligibility criteria differs by bank, but you usually need to be:
At least 18 years old
A UK resident
A sole trader, partnership or limited company
Some banks ask that you’ve been trading for a set time or have a minimum annual turnover too. If so, make sure you meet these criteria before applying.
Account fees
Many 'bad credit' business accounts charge higher monthly or transaction fees than standard accounts. Consider which transactions you’re most likely to carry out and look for an account with the lowest fees.
Features
Some accounts for bad credit come with limited functionality. Check what’s included, such as:
The ability to make payments
Send invoices
Integrate with accounting software
Receive international transfers
Credit facilities
Bear in mind that you’re unlikely to qualify for credit facilities such as an overdraft or business credit card if you have bad credit.
Account management
Providers offering business accounts with no credit check tend to be online only. However, some may allow you to pay in cash or cheques at Post Office branches or PayPoints (usually with limits).
How to increase your chances of getting accepted for a business bank account
There are several steps you can take to boost your chances of getting a business bank account if you have poor credit. For example:
Apply with the right provider – Challenger banks such as Monzo and Revolut often prioritise identity verification and business activity over credit history, making them a good starting point
Keep your business records organised – Make sure your financial documents, such as tax returns and business plans, are up to date, and that you’re ready to provide them if asked
Take your time – Don’t rush your application, it can be easy to make mistakes and errors can lead to rejection
Check your credit report – It pays to keep an eye on your credit report and correct any errors as soon as possible. If you’re a sole trader, you won’t have a business credit score, so banks look at your personal credit score
How to improve your credit score
If you have bad business credit, there are plenty of ways to improve it over time. Consider the following six steps:
Pay bills on time – Paying suppliers, lenders and service providers promptly can boost your credit score. Late payments can lower it
Reduce existing debt – Try to lower the balances on any credit cards, overdrafts or loans. Carrying too much debt compared with your available credit can make your business look financially stretched
Pay tax on time – File your accounts and pay your tax well before the deadline
File full accounts – If you file full accounts rather than submitting abridged or micro-entity accounts, your credit score should increase, because it provides more information about your company’s financial health
Update HMRC about company changes – Inform HMRC and Companies House about any changes to your business, such as a new address, as soon as possible so they have accurate information
Space out credit applications – If you’ve recently applied for credit, wait three to six months before applying again. Each time a provider carries out a hard credit check, your credit score temporarily dips. Lots of credit checks in quick succession can have a bigger impact
If you’re a sole trader, you can still follow many of the above tips to help improve your personal credit score.
FAQs
Does opening a business bank account affect your credit score?
It depends on the provider. Some only carry out a soft credit search, which enables them to confirm your identity and assess basic eligibility, without leaving a visible mark on your credit file or affecting your score. But if a provider carries out a hard credit check, this leaves a mark on your credit file and can cause your score to dip temporarily.
Do banks check your personal credit for a business bank account application?
That depends. If you are a sole trader, you won’t have a business credit score, so banks need to assess your personal credit score instead. For other business types, such as limited companies, a bank might choose to check personal credit if your business is new and hasn’t yet established much of a credit history. That’s why it’s important to look after both your personal and business credit scores.
Can I get a business bank account after bankruptcy?
You may still be able to get a business bank account after bankruptcy, but your options could be more limited. Some providers may reject your application if they see bankruptcy on your credit file. Others may offer a basic account with fewer features, likely with no overdraft or credit facility.
Before you apply, check the bank's eligibility criteria - this gives you a better chance of finding an account that suits your situation.
What should I do if my application is rejected?
If your application is rejected, ask the bank why it turned you down. It may not give you every detail, but it might tell you whether the issue relates to one of the following:
Your credit history
The documents you provided
Your business activity
Identity checks
Knowing this can help you put things right as you can then check your credit report, fix any errors and make sure your business details match official records before you apply elsewhere.
Try not to make lots of applications in a short space of time though - this can make it harder to get accepted.
Are online business accounts easier to get with bad credit?
Some online banks may accept businesses with poor credit, especially if you only need a basic account for payments and transfers. However, each provider sets its own checks, so approval isn’t guaranteed.
You may also get fewer features than you would with a traditional business account too.
Can I get an overdraft with a poor credit score?
You may find it harder to get a business overdraft if you have a poor credit score. An overdraft, when used, is a form of credit, so the bank usually checks your financial history before it makes a decision.
If it sees missed payments, defaults or high levels of debt, it may reject your request entirely or offer a lower limit.
You can still open a business bank account without an overdraft if the provider accepts your application though.