Every company’s first order of business is getting a business account. Getting the account set up as fast as possible is crucial in ensuring you can start receiving payments from clients and making payments to your suppliers.
It’s a seemingly easy task but one that can quickly turn into a nightmare, depending on various factors.
Any business wants to partner with one of the UK’s largest banks, HSBC. With over 600 branches in the UK, HSBC has one of the most lucrative business accounts for British businesses. They offer both business current and savings accounts with options for charity and not-for-profit organisations in addition to businesses.
Another first for HSBC is the Kinetic account, a bank account focussed on sole traders and single-director, sole shareholder limited companies. It seems like the perfect business account for you until they decline your business account request.
Benefits of an HSBC Business Account
Besides offering numerous business account options for different businesses, there are other benefits to opening a HSBC business account. For instance, the bank offers free banking for the first 12 months. This could be a lifeline for new businesses. However, all accounts have a monthly fee after the first 12 months.
The bank offers an overdraft facility that businesses can use to quickly and effectively address cashflow problems and other financial hiccups quickly and effectively. HSBC has over 600 branches and for businesses that means something. Speaking to customer support is easier, and finding a branch near you is relatively easy when you need to conduct business that requires your physical presence. Alternatively, you can use the 24/7 online and mobile account management to ensure you get access to funds when and where you need them.
Successfully opened business accounts on HSBC can be integrated with accounting software like Xero, QuickBooks and Sage, taking a huge administrative burden off the business’s shoulders. You can also get foreign currency accounts, which you typically don’t get with business accounts from other banks.
Why HSBC May Decline Your Business Account Request
Although trend-setting in many banking aspects, HSBC follows in the footsteps of others in other aspects. The bank promises quick turnaround on business account applications, but it could just as quickly turn down your request and decline your business account for various reasons.
Negative credit information
Banks do various background checks on you and your business when you submit a new business account request.
During this background check, the bank can unearth various titbits of information such as any history you have on checking and savings accounts, if you owe any unpaid fees or an overdraft account, the number of times you’ve applied to a new account, returned or bounced cheques among other details. Based on this information, the bank can decline your request for a business account because they deem you a high-risk individual.
You’ve filed for bankruptcy
Another glaring red flag that could be why HSBC declined your business account is that you’ve filed for bankruptcy in the past. Although you might have worked on your finances, banks see this as a huge red flag for most banks. Even if some banks allow you to open the account, it can only be a savings account in many cases. Because of the extensive background checks that HSBC runs, these details are hard to miss and will most likely contribute to the bank declining your business account.
Your identity can’t be verified
Financial institutions are required to complete a set of requirements called Know Your Customer (KYC) by verifying the account holder’s identity.
Most banks require two forms of identification, and at least one must be government-issued. If the bank can’t verify your identity for whatever reason, they will decline your application for a business account. Common reasons for failure to verify identity can be as simple as a mismatch, a type or insufficient documentation to as serious as a frozen credit report.
The industry your business is associated with
Sometimes, the problem is not you but your business. Not all business industries are equal from an economic and legal perspective. Though highly economically lucrative, some industries pose many legal concerns, and banks prefer to stay away from them.
If your business focuses on any one of the industries highlighted below, there’s a good chance it is the reason your business account was declined by HSBC;
- Multi-level marketing
- Adult services and products
- Credit repair services
- Dietary supplements
- Tech support
- Vape products and E-cigarettes
- CBD
- Gambling and betting
- iGaming
These industries often attract a high number of chargebacks and complaints. They also have high transactional volumes that open banks to liabilities, so they might prefer not to open a business account for businesses in these industries.
My HSBC Business Account Has Been Declined – What Next?
Having your HSBC business account declined might feel like being backed up against a wall. But all is not lost. Thanks to the rise of challenger banks, businesses have more options than they imagine when opening a business account. Various challenger banks offer business accounts that can easily rival and surpass what banks offer. You just have to look around. Some of the options that you should consider include;
Pay iO
One of the first places you should look when opening a business account is Pay iO. This financial processing service has many unique features that businesses will find beneficial over and beyond, providing them with the support to receive and send payments.
With a Pay iO business account, you can get account-to-account payments, removing middlemen and making payments faster and more convenient. You can also leverage vital tools offered by the services, such as open banking, to get paid in real-time to help you free up your money and resources by using plugins that allow you to customise the payment journey of your customers using the Pay iO API.
Businesses can keep tabs on their accounts on Pay iO and access them through mobile apps and the web, giving them unrivalled access to their funds. Large and international businesses will find Pay iO’s global payments a huge boost to receiving and making international payments while reducing administrative efforts.
On Pay iO, businesses can also get multi-currency accounts, allowing them to operate in various currencies more freely without limiting currency exchange fees.
As you can see, having your business account declined by HSBC is not the end of the world. There are other amazing options that you can look into that will help your business process payments easily and possibly even cost you less.
