Cant Open a Business Bank Account

Grumpy_chap

I am not exactly sure what the OP means by "tier 1" bank.  Maybe a clearing bank, as opposed to a Building Society?

It would also be helpful to understand what type of business the OP does as I cannot think of any sector where the business bank account

xlnc99 said:

has to be one of the big boys for business/clientele reasons.

I can understand that any reasonably sized business would require you to operate as Ltd Co, have VAT-registration, suitable business insurances and a business bank account in the name of the Ltd Co. 

I can't think of any reason why a Client would be that bothered about who a supplying business chooses to hold the business bank account with - if it was not a clearing bank then any delay in payment processing would affect the Ltd Co but not the Client.  Maybe, as was suggested above, it may be simpler for an overseas customer if it is a clearing bank.

nick74

I have dealt with companies who supply some of the worlds largest manufacturers and in one case even the United Nations, but have never heard of this requirement for a 'tier1' bank, or even what a tier 1 bank is. Hence my question to the OP on whether it is an overseas customer and 'tier 1' perhaps means something specific in their own country which has little relevance to the UK?

If my business depended on it to this extent I would be inclined to just bung my Starling account details down on the customer's form and let them worry about whether it was 'tier 1'' or not. Starling use sort codes beginning '60' so you can always pretend that its Natwest ;-)

xlnc99

Hi Guys,

Thanks for the responses. To clarify Tier 1 means reputable banks with a certain amount of revenue/assets (forgot) (cant remember the amount i believe its  at least 1 billion). This has what has been put to me. Yes they are overseas customers, in particular from Russia/China.

It is their requirement for these banks to be put in place - why? I have no idea, perhaps they feel more safer and secure with the big boys rather a newcomer.

NottinghamKnight

xlnc99 said:

Hi Guys,

Thanks for the responses. To clarify Tier 1 means reputable banks with a certain amount of revenue/assets (forgot) (cant remember the amount i believe its  at least 1 billion). This has what has been put to me. Yes they are overseas customers, in particular from Russia/China.

It is their requirement for these banks to be put in place - why? I have no idea, perhaps they feel more safer and secure with the big boys rather a newcomer.

How well do you know these customers, do you have measures in place to address money laundering for example?

Grumpy_chap

I don't know how you find out the revenue / assets (very different things) of a bank, but in "big finance" terms, £1billion is not really that much.

xlnc99

No concerns about money laundering or anything dodgy. That is all covered from my end and the other end. This is also one of the reasons (not all) but one of the reasons a big reputable bank is needed from the other side.
Perhaps i may have got it wrong, i will have to double check the exact terminology but i recall the figure billions, could be 10 or higher.

 

D3xt3r5L4b

xlnc99 said:

No concerns about money laundering or anything dodgy. That is all covered from my end and the other end. This is also one of the reasons (not all) but one of the reasons a big reputable bank is needed from the other side.
Perhaps i may have got it wrong, i will have to double check the exact terminology but i recall the figure billions, could be 10 or higher.

 

And they want to (supposedly) entrust you (and this “Tier 1” bank) with (supposedly) large volumes of cash and you can’t get your (supposed) figures correct?

xlnc99

@Deleted User aka D3xt35L4b 

Please refrain from posting on my threads, i have seen many complaints from users about your posts. You already been banned on on username, its only a matter of time before you get banned again. I have no interest in your comments and advice.

Thanks - Wish you well

D3xt3r5L4b

xlnc99 said:

@Deleted User aka D3xt35L4b 

Please refrain from posting on my threads, i have seen many complaints from users about your posts. You already been banned on on username, its only a matter of time before you get banned again. I have no interest in your comments and advice.

Thanks - Wish you well

No idea who or what you’re referring to there buddy.

Grumpy_chap

xlnc99 said:

@Deleted User aka D3xt35L4b 

Please refrain from posting on my threads, i have seen many complaints from users about your posts. You already been banned on on username, its only a matter of time before you get banned again. I have no interest in your comments and advice.

Thanks - Wish you well

I am not sure what the comment is that you object to, but no user gets to dictate who does or does not post on any thread.  If you wish not to see posts from any specific user, there is an ignore function.  

Sadly, we also see threads from time-to-time about people having their accounts frozen and how can they gain access to their funds.  Unfortunately, from any bank's perspective, a new business formed and then receiving large payments from overseas China and Russia may flag those automated alerts.  Even when the alert is subsequently proven to be erroneous, the inconvenience of a blocked account in the mean-time is high.

It is not only Dexerslab that raised the possibility of such an account being seen as possibly flagged for fraud / money laundering.  You responded:

xlnc99 said:

No concerns about money laundering or anything dodgy. That is all covered from my end and the other end 

It is good that you were already aware of the possibility of such a flag.  When you do open the business bank account, it would be pertinent to set out as part of the business plan submitted to the bank about the customer base and source of future funds - at least then the bank is fore-warned and can manage the account to expect such transactions.

I still don't know why the foreign customers would prefer a big bank compared to a newer startup.