Table of Contents
- What Is a Business Bank Account with Overdraft?
- Can You Get One with Bad Credit?
- Banks That Offer Accounts with No Credit Checks
- Best Overdraft Options
- How to Use Overdrafts Wisely
- FAQs
- Conclusion
Key Takeaways
- You can get a business bank account even if you have bad credit.
- Some UK banks don’t check your credit to open an account especially if it is basic accounts of people with bad credit histories.
- Overdrafts help you borrow money when your balance is low.
What Is a Business Bank Account with Overdraft?
A business bank account helps you manage money for your business.
An overdraft lets you spend more than what you have in your account.
You only pay interest on the money you borrow.
Can You Get One with Bad Credit?
Yes! Even with bad credit, you can open a business account.
Some banks don’t do credit checks.
They make it easy for small businesses and startups.
Banks That Offer Accounts with No Credit Checks
Here are some good choices if you have bad credit:
- Anna – No credit check, easy to use, great for new businesses.
- Tide – Fast setup, good for small business owners.
- Cashplus – No credit checks and has a prepaid card.
- CardOneMoney – Helps manage money better, made for bad credit.
- Fair Everywhere – Works well for businesses that deal with other countries.
Best Overdraft Options in the UK
| Bank | Overdraft Limit | Interest Rate / Fees | Key Features |
| Starling Bank | Up to £50,000 | 11.50% EAR; 1.75% annual fee | App-based management; quick application process. |
| Barclays | Up to £50,000 | 14.71% to 18.30% EAR; fees between £95 and £295 | Flexible options; higher limits available upon request. |
| HSBC | Varies | Subject to arrangement; interest charged on overdrawn amount | Provides a safety net for managing cash flow fluctuations. |
| Lloyds Bank | From £500 | Monthly/annual fees; interest on usage | Flexible borrowing with simple pricing structure. |
| NatWest | Up to £50,000 | Interest only on the amount borrowed; setup fee applies | Ideal for unexpected expenses; flexible repayment options. |
| Santander UK | £500 to £25,000 | Interest charged on overdrawn amount; annual fee applies | Suitable for small businesses; straightforward application process. |
For UK businesses looking for reliable and cost-effective overdraft options, Starling Bank stands out as the best choice. It offers one of the lowest interest rates (starting at 11.50% EAR), along with a user-friendly digital interface and quick application process—making it ideal for small to medium-sized businesses that want control and flexibility.
On the other end, Barclays is considered the least favorable due to its higher interest rates (up to 18.30% EAR) and additional fees, which can be less appealing for businesses trying to manage cash flow without incurring high borrowing costs.
Comparison: Invoice Finance vs. Overdrafts
| Feature | Invoice Finance | Overdraft |
| Cash Access | Tied directly to sales; as you issue more invoices, you can access more funds. | Fixed limit set by the bank; does not automatically increase with sales. |
| Scalability | Highly scalable; grows with your business’s invoicing volume. | Limited scalability; increasing the limit requires reapplication and approval. |
| Collateral Requirements | Typically requires only the invoices as collateral. | Often requires additional collateral, such as assets or personal guarantees. |
| Cost | May be slightly more expensive due to additional services like credit control and collections. | Generally lower cost; interest is charged only on the overdrawn amount. |
| Reliability | More stable; agreements are typically ongoing unless terminated by the client. | Less stable; banks can withdraw overdraft facilities at their discretion. |
| Best For | Businesses with growing sales needing flexible, scalable financing. | Businesses needing short-term, occasional cash flow support. |
Why Choose Macmanus Finance’s Invoice Finance?
Macmanus Finance offers a scalable, flexible, and growth-friendly solution. As your business sends out more invoices, your cash access grows — no need to wait for client payments or ask the bank for more credit. It’s built for fast-moving businesses that don’t want limits slowing them down.
Verdict: Invoice finance is generally more flexible and scalable, making it ideal for growing businesses that need continuous cash flow.
How to Use Overdrafts Wisely
- Check Your Balance Often: Know how much you’re spending.
- Read the Fine Print: Learn about fees and interest.
- Don’t Rely on It Too Much: Only use it when needed.
- Work on Your Credit Score: Pay bills on time and keep debt low.
FAQs
Can I open a business bank account with bad credit in the UK?
Yes, many banks let you open one without a credit check.
Will I get an overdraft if I have bad credit?
Possible but challenging. Some banks might ask for extra info or charge more.
What’s the usual overdraft limit?
It can be from £500 up to £250,000, depending on the bank.
Do all accounts offer overdrafts?
No, always ask the bank before you open an account.
How can I improve my chances of getting one?
Show good money habits and offer a guarantee if needed.
What is my other option aside getting overdrafts?
Invoice Finance. They are faster and less hassle.
Conclusion
You can still get a business account and even an overdraft with bad credit.
Look for banks that don’t check credit.
Only use overdrafts when needed and read all the terms.
This helps keep your business money safe and under control.
