How to open a business bank account

Step 1 — Sort your legal structure first

If you are incorporating, do it before you apply. Providers verify against Companies House, so the company must exist and its record must be accurate. Applications submitted before the register updates fail on mismatch.

If you are undecided, see sole trader or limited company — it changes which accounts will accept you.

Step 2 — Choose on how you actually operate

Not on the advertised monthly fee. Work out whether you handle cash, whether you are ever paid by cheque, roughly what balance you will hold, and whether you might need an overdraft. Those four answers eliminate most of the market quickly.

Then check eligibility before you invest time. Monzo requires every director and person of significant control to be UK resident. HSBC Kinetic is single-director only. Allica is for established businesses. A decline is not neutral — several providers run a credit search, and a cluster of applications is itself a risk signal.

Step 3 — Get your documents in order

Everyone needs: valid photo ID (passport or UK photocard driving licence — expired documents are refused automatically), proof of address dated within about three months, and evidence of UK residency.

Limited companies also need: company registration number, Companies House details exactly as filed, details of all directors and persons of significant control, registered and trading addresses, SIC code, and VAT number if registered.

App-based providers also want: a short selfie video for liveness checking, and sometimes your National Insurance number.

Step 4 — Write your business description before you start

Every application asks what your business does. This is not a formality — it is how the onboarding team decides whether your incoming payments will look expected or anomalous.

"Consultancy" tells them nothing. "IT consultancy for NHS trusts, three or four clients, invoiced monthly on 30-day terms, expecting £80,000 turnover" tells them everything. Write two or three sentences and reuse them.

Step 5 — Apply, once

App-based providers: expect same-day for a straightforward sole trader. High-street banks: one to three weeks for a limited company, longer with overseas directors or an unusual structure.

Apply to your first choice and wait. Do not open five applications in parallel.

Step 6 — Set it up properly

1. Move your Direct Debits and standing orders across, or use the Current Account Switch Service if you are switching.
2. Update your card payment provider’s settlement account.
3. Connect your accounting software and confirm the feed is pulling transactions.
4. Update your invoice template, website and payment links.
5. Tell regular customers — carefully, since emailing new bank details is exactly what invoice fraudsters do. Reference a genuine recent invoice and give a phone number they already have.

If you are moving from an existing account, the sequencing matters — see switching without breaking payroll.

If it stalls or gets declined

Silence usually means manual review rather than refusal. Chase politely and ask specifically what further information would help.

If you are declined, do not immediately reapply elsewhere. Audit your Companies House record, your SIC code, your addresses and your business description first — those cause far more declines than credit history. See why applications get declined.