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Bounce Back Loans

Taxpayers using personal bank accounts for business.

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It is not a requirement of HM Treasury that a claimant of a BBL should have a business bank account and I have some sole traders who use their personal accounts to conduct business. It helps them to have a clear idea of their financial position. Some, though not all, banks are insisting that customers open a business bank account as a condition of applying for the loan under the scheme. This is an insidious way of locking the customers into a business bank account going forward and levying charges, as some of the personal account holders pay low charges or none at all. Are others finding their clients have a similar experience? 
I have suggested to clients that they should bite the bullet on these costs, but bear it in mind and transfer to a personal account, with a different bank, when possible if they wish to avoid charges. However, I expect that 'free banking' will be a victim of the looming recession and they will be no better off.

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By NYB
08th May 2020 09:55

I dont think this is new. Its just that small SE can often get away with using a personal account. I have been in the same situation & was told in no uncertain terms should I be using my pesronal account for any form of business. I kept quiet and carried on. Of course a loan is a different ball game completely and I dont think there will be any alternative other than to open a business account which yes - traps you in and involves charges etc.

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Replying to NYB:
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By sammerchant
08th May 2020 10:31

Check https://www.moneysavingexpert.com/news/2020/05/small-business-boost-as-b...

If you use the one bank account for both business and personal, HMRC will have full access to this in the event of any inquiry. I believe that, unless they have strong evidence to suggest that a taxpayer is playing fast and loose with them, they may demand only the business bank account for inspection.

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RLI
By lionofludesch
08th May 2020 12:54

To be fair, account holders may be breaching their agreement by using their personal accounts foir business. Whether or not that's so, I don't see it as unreasonable for a bankl to ask an applicant for a business loan to have a business account.

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Replying to lionofludesch:
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By sammerchant
09th May 2020 10:13

But a number of banks are happy to process the BBL through the personal account. See https://www.moneysavingexpert.com/news/2020/05/small-business-boost-as-b...

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By jvenegas16
08th May 2020 18:31

Well, RBS can still deal with the BBL application without having to open a business bank account, but a loan servicing bank account, just for the purpose of repaying the loan with no charges or interest or overdraft.

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