- No monthly account fee and free UK digital banking*
- Comprehensive features: A full range of business banking services
HSBC UK Small Business Banking Account
-
Monthly Fee:
£0
-
Bank Transfers:
Free*
-
Overdraft:
Yes**
-
Account Access:
App, Online, Branch & Post Office
-
- No monthly account fee and free UK digital banking*
- Comprehensive features: A full range of business banking services.
- Available to Small Business Banking customers who are typically small enterprises with borrowing** needs of up to £100k and whose everyday banking needs don’t need the support of a Relationship Manager.
- No monthly account fee and free UK digital banking*
- Comprehensive features: A full range of business banking services.
- Available to Small Business Banking customers who are typically small enterprises with borrowing** needs of up to £100k and whose everyday banking needs don’t need the support of a Relationship Manager.
- No monthly account fee and free UK digital banking*
- A full list of prices and charges applicable can be found in HSBC UK’s Business Price List at business.hsbc.uk/legal
- Sole traders, limited companies, partnerships, limited liability partnerships and non-charitable clubs/associations/societies can all apply
- Must be a tax resident in the UK but not the Channel Islands or the Isle of Man
- **Borrowing is subject to application, eligibility, affordability and credit check. T&Cs, fees, charges and rates apply. For loans, you don’t need to open or maintain an HSBC Business Current Account unless a debenture or fixed charge over book and other debts is required.
NatWest Start-Up Business Bank Account
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Monthly Fee:
Free
-
Bank Transfers:
Free
-
Overdraft:
Yes
-
Account Access:
App, Online & Branch
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- 2 Years Free Banking on Everyday Transactions
- FreeAgent accountancy software is free for as long as you retain your bank account
- Overdraft applications are subject to status. Security and product fees may apply.
- Standard Tariff applies to transaction fees after 2 years.
- 2 Years Free Banking on Everyday Transactions
- FreeAgent accountancy software is free for as long as you retain your bank account
- Overdraft applications are subject to status. Security and product fees may apply.
- Standard Tariff applies to transaction fees after 2 years.
- Get 2 years free banking on everyday transactions
- *Free Agent is Making Tax Digital Compatible
- Branch & Online Access
- For businesses trading for less than 1 year & turnover of less than £1m
- Applicants must be 18+ and owner or director with no Bankruptcy, County Court Judgement or Court Decree.
Virgin Money M Account for Business
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Monthly Fee:
Free
-
Bank Transfers:
Free
-
Overdraft:
Yes
-
Account Access:
App, Online & Branch
-
- No monthly account fee, free day-to-day online business banking (excluding CHAPS & international payments) and Five-Star Rated by Moneyfacts in 2025
- Get six months free Xero (T&Cs apply) and easily integrate with Xero, Sage and QuickBooks
- Up to £1million annual turnover
- No monthly account fee, free day-to-day online business banking (excluding CHAPS & international payments) and Five-Star Rated by Moneyfacts in 2025
- Get six months free Xero (T&Cs apply) and easily integrate with Xero, Sage and QuickBooks
- Up to £1million annual turnover
- Free day-to-day online business banking (excluding CHAPS and international payments)
- Earn 0.25% unlimited cashback on eligible purchases on up to 8 debit cards
- Must be based and operated in the UK (excluding Channel Islands, Isle of Man and Northern Ireland)
- All owners, directors, senior managers and account signatories must be over 18 years old
Royal Bank of Scotland Start-Up Business Bank Account
-
Monthly Fee:
Free
-
Bank Transfers:
Free
-
Overdraft:
Yes
-
Account Access:
App, Online & Branch
-
- 2 Years Free Banking on Everyday Transactions
- FreeAgent accountancy software is free for as long as you retain your bank account
- Overdraft applications are subject to status. Security and product fees may apply.
- Standard Tariff applies to transaction fees after 2 years.
- 2 Years Free Banking on Everyday Transactions
- FreeAgent accountancy software is free for as long as you retain your bank account
- Overdraft applications are subject to status. Security and product fees may apply.
- Standard Tariff applies to transaction fees after 2 years.
- Get 2 years free banking on everyday transactions
- *Free Agent is Making Tax Digital Compatible
- Branch & Online Access
- For businesses trading for less than 1 year & turnover of less than £1m
- Applicants must be 18+ and owner or director with no Bankruptcy, County Court Judgement or Court Decree.
- The switcher service offer is not available to existing NatWest or Ulster Bank customers.
Allica Bank Business Current Account with Overdraft
-
Monthly Fee:
Free*
-
Bank Transfers:
Free
-
Overdraft:
Yes
-
Account Access:
App & Online
-
- Cover short-term cash flow gaps with a flexible overdraft tied to your business current account.
- Paying interest only on the amount used (no interest on unused limit).
- Established businesses that want an Overdraft decision in principle before switching banks.
- Earn up to 1.5% cashback on uncapped card spend. Exclusions Apply.
- Earn 1% cashback on every settled card transaction. Once your total card spend before a transaction exceeds £10,000 in a month, you will earn 1.5% on future transactions.
- Minimum overdraft limit £25,001
- Overdrafts available for business purpose only
- To use the overdraft, you’ll need to open an Allica Business Rewards Account and make it your primary account. Subject to Eligibility. Terms and Conditions apply.
- Fees apply: 1.5% arrangement fee on the agreed limit (and a renewal fee typically applies annually).
- The overdraft is secured and repayable on demand; security may include a debenture and/or personal guarantee.
- Cover short-term cash flow gaps with a flexible overdraft tied to your business current account.
- Paying interest only on the amount used (no interest on unused limit).
- Established businesses that want an Overdraft decision in principle before switching banks.
- Earn up to 1.5% cashback on uncapped card spend. Exclusions Apply.
- Earn 1% cashback on every settled card transaction. Once your total card spend before a transaction exceeds £10,000 in a month, you will earn 1.5% on future transactions.
- Minimum overdraft limit £25,001
- Overdrafts available for business purpose only
- To use the overdraft, you’ll need to open an Allica Business Rewards Account and make it your primary account. Subject to Eligibility. Terms and Conditions apply.
- Fees apply: 1.5% arrangement fee on the agreed limit (and a renewal fee typically applies annually).
- The overdraft is secured and repayable on demand; security may include a debenture and/or personal guarantee.
- £25,001–£2,000,000 overdraft limits
- Instant access to approved funds for a 12‑month term, typically reviewed for renewal annually
- Pay interest on only what you use
- Apply online in minutes; Get a clear answer on Overdraft in days not weeks
- Relationship-led support
- To open a Business Rewards Account, your business must have been incorporated for over 1 year. You must have £50,000 minimum balance OR have a loan product with Allica Bank.
- Business Overdraft available to UK limited companies or LLPs trading for over 24 months, with revenue of £500k+ (£300k+ with Growth Guarantee Scheme support).
- All applications are subject to status, approval and Allica Banks lending criteria.
The Financial Services Compensation Scheme (FSCS) protects up to £120,000 of eligible deposits per person or company, per firm, which is authorised and regulated by the Financial Conduct Authority (FCA). The limit is the total of all deposits held with one firm. For more information visit www.fscs.org.uk.
Our comparison is ordered by the commercial arrangements with some, or all, of the providers featured. Our service is free and commercial arrangements have no effect on the products you may select. To find out more about our independence, regulatory authorisation and how we earn money, visit the ‘About’ page on our website.
¹ BRANCH ACCESS Account provider maintains a nationwide branch access for face to face customer banking and/or relationship management.
² CASH DEPOSITS Facilities to deposit cash in either a branch, Post Office, Paypoint or other locations into the account. Limits and charges may apply.
³ NO HARD CREDIT CHECK A soft credit check for ID & Fraud purposes is carried out for account only applications. If you apply for a credit product such as an overdraft with the business account, a hard credit check will be initiated.
⁴ FAST OPENING Accounts opening in 3 days or less in most circumstances. Excludes application timescales.
⁵ GLOBAL CURRENCY ACCOUNTS Currency accounts with local (domestic) bank details for the EU (SEPA) and at least one international country e.g. USA (ACH) to transact as a local business. This feature can also be termed ‘local rails’. This differentiates them from providers offering local account details for the EU (SEPA) only and currency accounts or ‘pots’ that transact only via SWIFT.
⁶ ACCOUNTING The provider offers accounting features either through their own platform or via integration with third-party software like Xero, QuickBooks or Sage. Please note that third-party integrations usually require a separate subscription fee.
Types of Business Bank Account Available
- Accountancy Business Bank Accounts
- Bad Credit Business Bank Accounts
- Branch Access Business Bank Accounts
- Cash Deposit Business Bank Accounts
- Corporate Business Bank Accounts
- Fast Opening Business Bank Accounts
- Free Business Bank Accounts
- Freelancer Business Bank Accounts
- International Business Bank Accounts
- Joint Business Bank Accounts
- Multi Currency Business Bank Accounts
- Multi Director Business Bank Accounts
- No Credit Check Business Bank Accounts
- Online Business Bank Accounts
- Overdraft Business Bank Accounts
- Small Business Bank Accounts
- Sole Trader Business Bank Accounts
- Startup Business Bank Accounts
- Switcher Business Bank Accounts
How to Compare Business Bank Accounts
Understand Your Requirements
How you do business will affect the type of account you need. How many transactions will you have each month? Do you need to pay in cash? Do you need a local branch?
Check Eligibility
Most providers have a range of business accounts to suit different types of businesses. Check the eligibility of each account to make sure if suited to your business.
Compare The Latest Deals
There are numerous offers and deals to attract new customers which can be compared with our handy tool above. Always consider the cost of the account once the free period ends.
Understanding Business Bank Account Overdrafts
A business overdraft is a form of flexible borrowing linked directly to your business bank account. It acts as a financial safety net, allowing you to spend more money than you have in your account, up to a pre-agreed limit. It’s designed for short-term borrowing to help manage cash flow, covering temporary shortfalls when outgoings and income don’t perfectly align.
Unlike a traditional loan, where you receive a lump sum and repay it over a set period, an overdraft is a line of credit. You can dip into it as and when needed, and you only pay interest on the funds you actually use. Once you have funds coming back into your account, your overdraft balance reduces, and the interest charges decrease accordingly. For many businesses, it’s an essential tool for maintaining financial stability.
Arranged vs. Unarranged Overdrafts
It’s important to understand the difference between the two types of overdrafts:
- Arranged Overdraft: This is a facility that you apply for and agree with your bank in advance. The bank assesses your business’s financial health and offers you a specific overdraft limit with a set interest rate and clear fees. This is the most cost-effective way to borrow using an overdraft.
- Unarranged Overdraft: This occurs when you spend more money than is in your account without having a facility in place, or if you exceed your arranged limit. Borrowing in this way is significantly more expensive, with much higher interest rates and additional fees, and you risk payments not being made. It should be avoided wherever possible.
Key Benefits of a Business Overdraft
A well-managed overdraft offers several advantages for a business.
Smooth Cash Flow Management
This is the primary benefit. Nearly every business experiences peaks and troughs in its cash flow. An overdraft can bridge the gap between paying suppliers or staff and receiving payment from clients, ensuring that essential bills are always covered on time.
Flexibility and Control
You only borrow what you need, when you need it. If you have a £5,000 overdraft facility but only need to use £500 for a few days, you only pay interest on that £500 for that short period. This gives you much greater control over your borrowing costs compared to taking out a fixed loan.
Seizing Opportunities
A sudden opportunity might arise, such as a chance to buy stock at a discount or invest in a piece of equipment that will improve efficiency. An overdraft provides instant access to funds, allowing you to act quickly without the lengthy application process of a standard business loan.
How to Apply for a Business Overdraft
The process for securing an overdraft usually involves an application to your business account provider. They will assess the risk and decide whether to offer you a facility, and how large it should be. They will usually look at:
- Trading History: Usually a solid trading history, often for at least 12 months, to demonstrate consistent income is preferred.
- Business Accounts: You will need to provide up-to-date accounts showing the financial performance and health of your business.
- Credit History: The bank will run a credit check on the business. For sole traders and small limited companies, they will often check the personal credit histories of the owners or directors as well.
- Business Plan: For newer businesses, a strong business plan with clear financial forecasts can support your application.
What to Compare When Choosing
Not all overdrafts are created equal. It’s important to compare:
- Interest Rate (EAR): The Equivalent Annual Rate shows you the interest you’ll pay over a year.
- Arrangement Fee: A one-off fee for setting up the overdraft facility.
- Renewal Fee: Many banks charge an annual fee to keep the facility active.
Business Bank Account with Overdraft FAQs
1. What is the main difference between a business overdraft and a loan?
An overdraft is a flexible line credit facility for short-term cash flow needs, where you only pay interest on the funds you use. A business loan provides a fixed lump sum of cash that you repay in regular instalments over a set term, making it better for long-term borrowing.
2. Can a new startup get a business overdraft?
It can be challenging for a brand-new startup to secure an overdraft, as banks want to see a proven trading history to assess risk. However, some banks offer specific startup packages that may include a small, initial overdraft facility, often dependent on a strong business plan and potentially an additional personal financial assessment.
3. Will using a business overdraft affect my credit score?
Yes, it can. A business overdraft is a line of credit that will appear on your business credit report. If you manage it responsibly, staying within your limit and making regular payments into your account, it can demonstrate good financial management and potentially improve your credit score. However, frequently exceeding your limit or relying on it constantly can have a negative impact.
4. Are business overdrafts secured against property?
Most business overdrafts are unsecured. This means you don’t have to provide property or assets as collateral against the overdraft limit amount. However, for very large overdraft facilities, the bank may require a form of security or personal guarantee.
5. How is the interest on an overdraft calculated?
Interest on a business overdraft is often calculated daily based on the amount you are overdrawn by at the end of each day. The total interest is then usually charged to your account monthly. This is why the cost goes down as soon as you deposit funds to reduce the overdrawn balance.