Sole trader/business startup loans/grants?

[Treetom15]

On 19/04/2023 at 11:01, dumper said:

If you have the work and can prove it talk to a bank you will need a business account anyway, write a plan and see if you can get an appointment always better face to face 

Cheers, I have a couple of banks locally that do business accounts & loans so will speak to them re an account. 

[Steve Bullman]

You don't have to have a business account. I ran my business from my personal account for years until I went limited.

[Dan Maynard]

2 hours ago, Steve Bullman said:

You don't have to have a business account. I ran my business from my personal account for years until I went limited.

Check the bank t&c though, mine changed in the last few years to explicitly exclude running a business on the personal account.

[Steve Bullman]

2 minutes ago, Dan Maynard said:

Check the bank t&c though, mine changed in the last few years to explicitly exclude running a business on the personal account.

I think that has always applied to all banks, but unless you’re taking hundreds of transactions every month you seem to be able to mostly slip under the radar. I was never once questioned by my bank in the 10 years I was a sole trader 

[doobin]

5 minutes ago, Steve Bullman said:

I think that has always applied to all banks, but unless you’re taking hundreds of transactions every month you seem to be able to mostly slip under the radar. I was never once questioned by my bank in the 10 years I was a sole trader 

Same here, despite 5k of finance per month!

[Treetom15]

I’m thinking it’ll probably be easier to just open another current account and use that for work, i didn’t realise you had to pay fees for a business account! Like @Steve Bullman said, for the small amount I’ll be turning over (in the grand scheme of things) I can’t see it being a problem. 
 

Also turns out my current bank offer small loans at a reasonable rate so I doubt I’ll bother with a business loan as it’s a lot less hassel and very similar interest! 

[doobin]

29 minutes ago, Treetom15 said:

I’m thinking it’ll probably be easier to just open another current account and use that for work, i didn’t realise you had to pay fees for a business account! Like @Steve Bullman said, for the small amount I’ll be turning over (in the grand scheme of things) I can’t see it being a problem. 
 

Also turns out my current bank offer small loans at a reasonable rate so I doubt I’ll bother with a business loan as it’s a lot less hassel and very similar interest! 

I wouldn't bother opening another account. It's not hard to separate business transactions from personal each month, and most of it you will be doing off email and paper receipts anyhow.

 

If you open another personal account soley for business use, it might be obvious to their algorithms. It will also probably be harder to do a personal loan through a new account.

 

I bought my first machinery with a personal loan, I think at 3.3%! Those were the days! Just tick the box that says 'new kitchen' or some bullshit. If you are getting offered a reasonable rate in the current climate, it's definitely the easiest route.

 

 

Funny story- I do actually have a business account- opened solely to receive and service a bounceback loan. I don't use it for anything else. NatWest were about to put up their personal overdraft rates to something daft like 30%, so I thought I'd open a business account for a cheaper overdraft. They told me they couldn't consider my banking history of ten plus years running through a personal account, even though I was a sole trader, so they couldn't offer me an overdraft on the business account for a year. Yet in the same breath they suggested I apply for a BBL instead.

 

Five days later, this virgin account had £50k credited to it. So NatWest wouldn't consider my business history in one breath, but were satisfied that I was a genuine business for a BBL? Or.... as soon as it was government backed, no ****************s given!

 

Basically mate, the banks are bent anyhow and so long as you pay it back no questions will be asked.

 

 

[Jackalope]

41 minutes ago, Treetom15 said:

I’m thinking it’ll probably be easier to just open another current account and use that for work, 

This is exactly what I did. Make sure you pay card/ online for all business transactions and it keeps life very simple at accounting time; look up your bank statement, cross reference with the pile of receipts, job done. 

 

Neater and faster than having to separate transactions like £17.50 at The Foresters (beers) from £18 Forest&Gdn (2 Stroke). I even went as far as opening the 'work' account with a different bank so the debit cards are different colours! 

[doobin]

25 minutes ago, Jackalope said:

This is exactly what I did. Make sure you pay card/ online for all business transactions and it keeps life very simple at accounting time; look up your bank statement, cross reference with the pile of receipts, job done. 

 

Neater and faster than having to separate transactions like £17.50 at The Foresters (beers) from £18 Forest&Gdn (2 Stroke). I even went as far as opening the 'work' account with a different bank so the debit cards are different colours! 

How many of your business transactions do you not have a physical paper or email receipt for? Why are you cross-referencing your bank account with phyical receipts that you already have in front of you?

 

Furthermore, if you are VAT registered, a line on the bank statement is not acceptable to HMRC as proof of a valid VAT deductible expense. So OP may as well get in the habit of proper book-keeping from the off IMHO.

 

I do my books every month in just half an hour with a spreadsheet. Physical paper receipts are photographed to preserve for the required six years, email receipts are saved to the same folder.

 

 

[Jackalope]

17 minutes ago, doobin said:

How many of your business transactions do you not have a physical paper or email receipt for?

Oh I have the receipts, but keeping them ALL safe and knowing which ones are paper Vs in an email is where I'm less good at remembering. So cross referencing the bank statement just ensures I don't miss anything and thus lose out on a tax deductible expense. 

 

I'm not VAT registered, nor anywhere near the threshold but I take your point that if that is a short term likely scenario then start as you mean to go on.