Switch Business Bank Account: How to Move Smoothly

If your current bank isn’t delivering, there’s no reason to stick around. Switching a business bank account in the UK is far easier than most people think – and it can quickly pay off through lower fees, better digital tools, or even a switch incentive.

The Current Account Switch Service (CASS) streamlines the process for many business accounts, automatically transferring payments, direct debits, and standing orders. (Eligibility depends on your provider and account type, but most small and medium businesses are covered.)

In short: Switching doesn’t have to be a headache. In fact, it could be an easy win for your business. In this article, we’ll cover the reasons why you’d switch a business bank account, how to do it and the other funding options you’ve also got available.

Why switch your business bank account?

The main reason to switch business bank account providers is better value and service. You may be paying higher fees than necessary, dealing with outdated digital tools, or experiencing poor customer service from your current bank. You may also have outgrown their original account, or your banking needs have evolved since they first opened their account.

Switching could save you money: Better interest rates on deposits, lower monthly fees, and reduced transaction charges could all boost your bottom line. Some banks offer competitive overdraft rates or more favourable lending terms that could help you with cash flow management.

Digital banking capabilities vary substantially between providers. In recent UK banking app rankings, Starling and Monzo consistently rank well for usability and features, while traditional high street banks like Barclays and HSBC score lower (often criticised for clunky design and limited functionality). If efficient, mobile-first banking matters to you, these differences can translate directly into time saved and fewer financial headaches.

Then there’s perhaps the simplest reason of all: Money. Many banks actually offer an incentive for switching your business bank account to them. Incentives like cashback payments, free banking periods, or other rewards. These incentives can provide immediate value, though it's important to weigh them against long-term costs and benefits.

How does the business bank account switch process work?

The process of switching a business bank account has been streamlined through the Current Account Switch Service (CASS). While CASS doesn’t cover all accounts (it’s a voluntary scheme), it does cover most. Unless there’s a highly compelling reason, you should stay within the confines of CASS. It really is so much simpler.

CASS handles most of the heavy lifting for you. When you open your new account, you simply provide details of your old account and sign a switching instruction. Your new bank takes care of moving your direct debits, standing orders, and regular payments.

The service redirects payments from your old account to your new one for a period, giving you time to update your details with customers, suppliers, and other contacts. 

Any payments that arrive at your old account during this transition period are automatically forwarded to your new account, and any future payments made to your old sort code and account number are redirected for up to 13 months (though you should update your details as soon as possible).

Do I need to close my old business account after switching?

If you switch your bank account using the Current Account Switching Service, your old account is closed automatically during the process. The service ensures all remaining funds are transferred to your new account and that the old account is properly closed without any action required from you.

What to consider before switching bank accounts

Before you switch business bank account providers, have a look through the account fees, online services, and additional features. There might be an enticing intro offer on the table – but you’ll need to live with the account in the long term. 

The bank’s digital capabilities should be a key consideration, especially if you manage your business finances remotely. There are services online where consumers rank and review banking apps. 

Consider the impact on any existing financial products linked to your current account. Business loans, overdrafts, or credit facilities might be affected by switching accounts, and you may need to reapply or renegotiate terms.

Think about your relationship managers and any personal connections you've built with your current bank. While this shouldn't override significant financial benefits, established relationships can provide value during challenging periods or when you need additional support.

Does switching bank accounts affect my business credit score?

Switching business bank accounts typically has minimal direct impact on your business credit score. The act of closing one account and opening another doesn't usually appear on your credit file in a way that would harm your rating.

Most credit reference agencies focus more on your payment history, credit utilisation, and length of credit relationships rather than which bank holds your current account. Maintaining good financial habits during and after the switch is more important for your credit score than the switch itself.

Alternatives to switching and other funding options

Before switching your business bank account, consider whether you can negotiate improved terms with your current provider. Banks often have retention teams authorised to offer better rates or reduce fees to keep existing customers.

A simple conversation might secure the improvements you're seeking without the hassle of switching.

Opening an additional business account alongside your existing one can provide some benefits of switching while maintaining continuity. You can use a second account for specific purposes, such as online payments or international transactions, whilst keeping your main account for day-to-day operations.

If your primary motivation for switching is access to better lending options or improved cash flow management, switching banks doesn't fully address your funding needs. Traditional business bank accounts, while essential for day-to-day operations, often have limited lending capabilities or lengthy application processes for credit facilities.

For businesses needing flexible funding solutions, iwoca provides business loans ranging from £1,000 to £1,000,000. Unlike traditional banks, we offer fast decisions, with many applications approved within hours rather than weeks.

Our Flexi-Loan product lets you access funds when needed and pay interest only on the amount you actually use, providing better cash flow control than fixed-term loans.

Can I switch a personal account to a business bank account?

You cannot directly switch a personal current account to a business account using CASS, as the switching service only operates between accounts of the same type. Personal and business banking are treated as separate categories with different regulatory requirements and features.

If you've been using a personal account for business purposes, you'll need to open a dedicated business account separately. Most banks require business accounts for limited companies, and even sole traders benefit from keeping personal and business finances separate for accounting and tax purposes.

Looking for funding that works with any business bank account?

Switching banks can be a smart move — but you don’t need to change your bank to unlock flexible business finance. iwoca works with most UK business bank accounts, so wherever you bank, you can access fast, fair and flexible funding.

• You’re in control: borrow what you need, when you need it and only pay interest on what you use.
• Repay early with no fees: reduce interest costs and control your term.
• Top up on-demand: as your business grows, you can access more funds without reapplying from scratch.
• Fast decisions: many businesses get approved within hours, not weeks.
• No need to switch banks: iwoca connects with your existing account – no disruption, just funding that fits.

‍Apply today to see how much you could borrow.