The days of the legacy banks are over - at least that's what so-called ‘challenger banks’ are claiming. There are a number of them vying for customers’ favour, so it can be hard to know which, if any, to pick.
In the past, these exciting startups were designed specifically for consumers. But there is an increasing number of challenger banks offering business banking services, and some of them are hoping to revolutionise the world of small business finance. Here, we’ve rounded up some of the best.
As we reported last month, new challenger bank Tide is aiming to make it much, much easier for small business owners and the self-employed to set up a business bank account. You can complete the entire process through their mobile app, and you can use your passport or driving license as proof of ID.
Tide also has a wealth of useful features once you’re signed up. The app includes an automated bookkeeping function, and will automatically categorise transactions for you. You can create invoices and pay suppliers from within the app as well. In the near future, the company say they will be launching pre-approved credit facilities, forex integration, and functionality for multiple employees.
Aldermore are amongst the more established of the challenger banks. They made their name offering invoice finance services to growing businesses. Under these arrangements, small businesses can borrow against the value of their unpaid invoices, converting those outstanding payments into working capital.
Today, Aldermore offer both business and consumer banking services. As well as invoice finance, they provide asset finance and property development finance.
Importantly, though, Aldermore have now branched out into other areas of business banking. Today, the bank includes business and corporate savings, commercial mortgages, and buy-to-let mortgages in their portfolio of offerings.
Metro Bank only launched a few years ago but they already have an impressive presence on the High Street, including several prime central London branches.
Metro Bank’s big sell revolves around their opening hours: their branches are open seven days a week, from early until late, which could be a boon for business owners who work irregular hours. They also offer a comprehensive business banking app, along with access to a London-based call centre.
However, the documentation needed in order to set up a business account with Metro Bank is significantly more extensive than that with Tide. You’ll need to provide proof of ID, and if you’re a sole trader you’ll also need bank statements, utility bills, invoices, HMRC correspondence, and more.
Monzo isn’t quite a bank, but it’s still taking the world of finance by storm.
Monzo is a great way to keep track of your spending. The card and app offer instant spending notifications, budget management capabilities, and real-time balance and other data on hand. It’s a simple way to manage budgets and, while it might not be as fully-functional as some of the competitors we’ve looked at here, it can be a great way to get a handle on your outgoings.
Just as importantly, set-up and management of your Monzo account is free, and there are no charges for using your card abroad.
Do any of these banks take your fancy? Let us know in the comments.
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