UPDATE: This article was originally written over 5 years ago. It has been kept for reference only. Cashplus is now a fully fledged bank gaining its UK banking licence in 2021.
The Cashplus Business Account is our top recommendation for those struggling to open a business bank account due to a poor or adverse credit history, but what exactly is it, and how does it work?
We take a closer look at this business bank account alternative.
Note: CashPlus is currently offering 1% cash back on business spending worth up to £1,000 per month.
When is a bank account not a bank account?
The Cashplus Business Account isn’t really a bank account in the traditional sense (though that may soon change). Instead it works more like a prepaid credit card with a host of extended banking functions. Cashplus (formerly APS) describes it as a ‘Prepaid Bank Account Alternative.’
Don’t let the description fool you though, the account does offer many of the same features as regular high-street business bank account, but as it’s a prepaid account there’s no credit check, meaning it’s open to those with bad/poor credit histories, or who might have previously been turned down for a business bank account.
Cashplus is the market leader in prepay cards, with clients ranging from government departments, councils, small businesses, and sole traders. The company has issued well over a million CashPlus Mastercards, processed over £8bn worth of payments, and holds over £200m of deposits, so your money is certainly in safe hands.
Whats more is that Cashplus recently announced its application for a banking licence, meaning opening an account now could be a method in gaining a fully fledged bank account in the future.
What can I do with the account?
- Receive and make (electronic) payments in your business’ name
- Setup standing orders and direct debits
- Pay in cash (via a Post Office)
- Withdraw money
- Access online banking
- Receive international payments
What can’t I do?
- Pay in or write cheques
- Visit a branch (there are none but customers can use the Post Office)
Cashplus has a deal with the UK Post Office, that allows its customers to make deposits, withdrawals, and enquiries at over 11,000 Post Office branches across the UK. It may not have any branches itself, but this new deal puts it right up there with some of the main UK banks in terms of high street presence.
A little less known fact is that Cashplus also has a limited credit licence. Meaning it can offer support to its business customers in terms of loans, and overdrafts up to £2000 if required. These are set against business earnings and paid back through deposits on the card. Once the company obtains its full banking licence it hopes to be able to offer loans at much better rates to those who might normally struggle to obtain businesses financing from the main banks.
You can also receive international payments into your account, but it requires calling customer services to get a SWIFT/IBAN number.
How much does it cost?
The Cash Plus Business Account has an annual fee of £69 but the first year’s fee is now refunded. Still, this compares well with offerings from Barclays (£78 – £6.50 per month), and Santander (£90), however, it also carries a £2 charge for cash machine withdrawals. To keep costs down, we recommend only using the card electronically, and to transfer any drawings directly to your personal bank account.
Who can apply?
The good news is that this account doesn’t require a credit check, meaning it’s suitable for those with little or no credit history, or those with previous defaults, county court judgements, or IVAs, so bad credit is fine. All you need to do is be able to prove your identity and address.
The decision is instant, so all being well, you could have a new account set up in your business name, with account number and sort code in a few minutes after applying, and your Mastercard in your hand in three business days. Compare that with 14-21 days for TSB, and you can see why it’s our top recommendation for those needing an account in a hurry.
These type of card based accounts are growing in popularly, especially with freelancers, contractors, tradesmen, hairdressers etc.. setting themselves up as limited companies. The Cashplus business account is relatively cheap, and far quicker to set-up than a traditional account, making it ideal for those that need an account open ASAP