CHOOSING A BANK

If you have a have a personal account with a bank and you are happy with their service, it is useful to speak to them first. If you already have a good relationship with them this may make things easier for you. However, it should not stop you from shopping around for the best deal. If your existing bank is willing to offer you this, fine. If not, look around and choose the one that will.

The following sections cover the key factors that are important in deciding your choice of bank.

Bank charges

Banks charge their business customers for many types of transaction. The amount they charge and the type of transactions that are chargeable varies from bank to bank. Some typical transactions that attract bank charges are:

• Paying cash into the bank;
• Writing cheques;
• Direct debits and standing orders;
• Duplicate statements.

Free banking for new customers

Free banking is provided by some banks for new customers. In several cases, standard bank charges are not applied for 12–18 months, which is very beneficial. Although this can be a great incentive, it is important to ascertain what your charges will be once the free banking period is over.

Location

You will need to pay cash and cheques into the bank on a regular basis. You may also need to visit the branch to set up your account, talk to business advisers and complete other paperwork. Because of this, it makes sense to use a bank that is located close to your pub. Banks with parking facilities or located close to a place where you can park your car will make the task of paying in cash safer and easier.

Night safe facilities

Night safe facilities can be an advantage. These can be used to deposit cash out of hours and on bank holidays, there by reducing the amount of cash you hold on the premises. This is important from a safety point of view, and your insurance policy may restrict the amount of cash you are allowed to hold on the premises too.

On-line and telephone banking

Many banks now offer on-line and telephone banking services to their business customers. This allows you to check balances, make payments, set up direct debits and standing orders and provides a range of other services. You can use this facility out of normal bank opening hours and eliminate the need to visit the branch for many transactions. It is a great benefit to licensees who are often bound to their pubs for long periods of time.

Access to support and advice

Having access to support and advice can be important, particularly in the early stages of running your business. It is worth checking whether you have easy access to business advisers and the bank manager. Having a single point of contact who knows you and your business can be very helpful.

Overdraft facilities

Having an overdraft facility helps cover your short-term cash-flow shortages. Overdraft facilities vary from bank to bank; some may not offer such a service to new customers while others will.

Loan facilities

You may need additional capital to fund the acquisition of your pub or require finance in the future to further develop your business. Whether they will help finance your business and what rates of interest they will charge, need to be considered.

Merchant services

Accepting debit and credit cards is essential for pubs serving food. Today’s customer expects to be able to pay for meals using their plastic. Not being able to accept debit and credit cards is likely to adversely affect your food sales. In order to accept debit and credit cards you require a merchant account. Choosing a bank for your business account that can also provide you with a merchant account can make the process easier, but you can open a merchant account to be used alongside a business account from another bank. See the section, ‘How to accept debit and credit cards’.

Business credit cards

A business credit card is useful for making purchases. Some banks may require you to have banked with them for a period of time before they will issue a credit card to you for your business account. Enquire at different banks about this facility.