If you run a business, you may be considering which options are available for managing your finances. Although a bank account is a convenient option, there are other solutions available, including PayPal. To help you decide which option is best for you, we have created this quick guide.
Many people are familiar with PayPal as a method of payment, as it is commonly used as a digital wallet. As a business owner, you will be able to use PayPal to accept online and in-person electronic payments. However, PayPal also provides facilities such as loans and online invoicing.
As with most business banking solutions, there are charges involved. Each time you process a payment through your PayPal account you will need to pay a fee. This is usually charged as a percentage, in addition to a fixed fee based on the currency used. You will also be charged for international sales and micro-payments. Although it is usually free to transfer funds from PayPal to your business bank account.
If you are considering whether to use PayPal or a standard business bank account, you need to think about the type of business you operate. Think carefully about the services which your business requires and the financial implications.
If you operate a limited company, legally you will be required to open a separate business account. Although you will be able to use PayPal, you will still need to open a business account to transfer the funds into. If you are classed as a sole trader, although you do not legally require a business account, there are many benefits.
Think about the features you require, whether PayPal will provide these and the overall cost of PayPal. There are features which a standard business bank account will provide, which may be essential to your business. For example:
A cheque book
A business support manager
The ability to pay cash into your account
There are many new challenger banks which provide online bank accounts to rival banking services such as PayPal. Many of these online alternatives offer low-cost online banking, with the convenience of many traditional high-street accounts.
A great way to find out whether a business bank account is the ideal option for your business is to compare the available accounts. Once you understand which features are available and the cost, it will be possible to quickly compare against PayPal accounts. You need a business account which eases your financial management burdens and provides the facilities you require.
Our useful comparison service will help you compare accounts from some of the most popular traditional and alternative banks. Simply decide which facilities you require and use the quick filters to create a simple list of potential accounts.
If you decide to open a business bank account, the process is designed to be quick and straightforward. Like PayPal, the online banks provide an online application form which will ask for a few key details. To speed up the application you should have your personal and business details to hand. These include your address, Company Registration Number and your annual turnover.
If you are considering PayPal because you are unhappy with your current business bank account, there are always alternative banks available. It is very quick to switch bank accounts, with many banks part of a 7-day switch guarantee scheme.
We always advise comparing your businesses financial products regularly to ensure you avail of the best deals. To find out more about our comparison services, please contact our team today.