Bad Credit No Longer A Barrier To Business Banking
28 April 2008 / by Rachael Stiles
Natwest and RBS are offering entrepreneurs the opportunity to open a business banking account even if they have a bad credit history.
From June 2nd, aspiring businesspeople who have previously been unable to open current accounts for their businesses as a result of their credit status, will now be able to gain access to the services they need for the day-to-day running of their businesses.
The account will offer all the transactional features of a business banking current account, with the exception of borrowing. It will allow those with bad credit a chance to repair their credit history in order to qualify for access to borrowing facilities in the future, and offers two years free banking if the business has begun trading in the last 12 months.
Steve Pateman, chief executive of business banking at NatWest and RBS, said: “We recognize that although there are many reasons why customers may have impaired or limited credit records, this does not mean that a new business venture cannot be successful – frequently they have learned valuable lessons from the experience. As the leading bank for small business, we work to encourage business ambition and support budding enterprises and as such NatWest and RBS will open accounts for customers with a limited or poor credit history on a credit only basis.”
The two banks have said that they are making financial products available which might otherwise be unattainable for those with a less than perfect credit score. The business account, called the Foundation Account, offers the traditional benefits of a current account, such as a cheque book, debit card, standing orders, direct debits and access to online, telephone and mobile banking facilities.
David Frost, director general of the British Chambers of Commerce, welcomed the announcement: “BCC welcomes this move by NatWest and RBS which will further encourage the spirit of enterprise in this country and may also turn around the fortunes of those enterprises previously thwarted in their attempts to obtain support for their business.”
Andrew Donaldson, of Active Supply & Design, who set up his first business with help from The Prince’s Trust, added: “There must be lots of good business ideas that never get off the ground because aspiring entrepreneurs can’t find the right support. When I started out, an account like this would have been very welcome and I’m sure will be a major boost for businesses starting out today without the right credit history.”
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