limited company setup, recommend a bank? overdrafts, etc

timmer3

i've been an IT sole trader for about 15 years with a good history with AIB the whole time. at the moment i have an overdraft of €2000 on a 'business/personal' bank account which does not attract the business banking fees, and my bank manager put some kind of add-on to the account that means cheques clear instantly, which helps with cashflow.

i'm switching to a limited company in the new year and want to find a good bank. i have no loyalty for AIB but stayed with them for convenience and the advantage of the payments clearing straight away. also in my opinion their online banking is very good.

i'm hiring more staff and would like an overdraft of 10k to cover any unexpected shortfall in income during the year. my contact in AIB said i can get free banking for 2 years as a new company but long term that's not worth much, and i'm wary of their other marketing practices to suck you in and then rip you off (e.g. opened a savings account at 5% interest rate, and it gradually drops to 0.1% after a few years).

i want to choose carefully and am very interested to hear if anyone has recommendations? i have had positive dealings with ulsterbank for some personal banking.

pedroeibar1

timmer3 wrote: »

i've been an IT sole trader for about 15 years with a good history with AIB the whole time. at the moment i have an overdraft of €2000 on a 'business/personal' bank account which does not attract the business banking fees, and my bank manager put some kind of add-on to the account that means cheques clear instantly, which helps with cashflow.

i'm switching to a limited company in the new year and want to find a good bank. i have no loyalty for AIB but stayed with them for convenience and the advantage of the payments clearing straight away. also in my opinion their online banking is very good.

i'm hiring more staff and would like an overdraft of 10k to cover any unexpected shortfall in income during the year. my contact in AIB said i can get free banking for 2 years as a new company but long term that's not worth much, and i'm wary of their other marketing practices to suck you in and then rip you off (e.g. opened a savings account at 5% interest rate, and it gradually drops to 0.1% after a few years).

i want to choose carefully and am very interested to hear if anyone has recommendations? i have had positive dealings with ulsterbank for some personal banking.

For starters, interest rates have changed 'somewhat' in a few years and any of the better banks with proper ratings are today actually offering negative rates on short term deposits. So the bit in bold above does not make sense.

You have relationships with two banks, pick the one with the account handler you get on with the best. It does not really matter which bank you pick (or any other one) as you are not big enough to count for much. Nor will you for quite a while, if ever. But a friendly a/c handler might tell you the truth before or when a problem occurs which is worth a lot. Review the position if your a/c handler is moved. A couple of hundred quid either way is nothing in the overall scheme of things. I'd far rather know the (unpleasant) truth today than be pi$$ed around by platitudes and BS for weeks/months. Build on a relationship, not the difference of saving a few bob on fees.

timmer3

that's a very helpful reply. i'm leaning to go with ulster bank as i know the local branch manager better there, i get the impression AIB have de-personalised their banking service in recent years.

hfallada

AIB are probably the best for business banking. Their online banking is the best. BOI online banking for business is like something from 1996. I don't know anyone with ulster bank

OP every bank has depersonalised their service. They can't remain competitive if they have tons of staff. It doesn't make sense having 5 bank tellers at the counters lodging cheques and cash, when it can be done on an automated machine.

AIB still have 24 hour support with their bank accounts and if you have a good relationship with your existing branch. There is no need to switch really.

timmer3

hfallada wrote: »

AIB are probably the best for business banking.

i'm interested to hear what they've done to win you over? they all have 24 hour online banking and i personally have no need to be phoning the bank outside hours.

hfallada wrote: »

BOI online banking for business is like something from 1996.

agreed, i remember when it came out first it was embarassing, sounds like nothing has changed.

hfallada wrote: »

every bank has depersonalised their service. They can't remain competitive if they have tons of staff. It doesn't make sense having 5 bank tellers at the counters lodging cheques and cash, when it can be done on an automated machine.

i have no objection to this and every bank has obviously had to cut costs and move people to online services. the difference is when you go to the branch with some banking need, e.g. looking for a mortgage, and it seems to mean nothing that you have a good business and personal record (20+ years), but ulster bank did grant the mortgage despite having no relationship. in my experience AIB managers have very limited ability to influence decisions, and their relationship with the customer doesn't stand for much. it all goes on to the head office where the stats machine makes the decision. and fair enough, every mortgage application has to stand on its own merit and pass stress tests, and there was far too much easy lending in the past. but ulster bank had access to all the same information and were a lot more flexible to deal with, and came up trumps when it counted. that's who i want to be dealing with.

my other minor complaint with AIB is about their savings accounts, they offer promotional rates to get you in, and then reduce it down to near zero. this happened during years of consistently high interest rates as well as the current situation, so it's nothing to do with the reduced ECB rates IMHO. i once asked a branch staff member what the interest rate on an account was and she was too embarassed to say, and recommended i keep opening a new account every year to keep getting a decent rate. i have long since moved to rabo for transparent savings offerings. AIB's tag line is "You’ll be surprised how quickly your money can grow with AIB."

Graham

Ask your existing bank can they meet your specific requirements (e.g. €10k overdraft facility).

If not, move onto the next bank.

Unless you have some very specific/specialised banking requirements, they are all much of a muchness. Your history with your current bankers MAY come in useful in the future.

If you are already in the IT business, the amount of time you've already spent thinking about this has already costs you more than any potential saving you might make by switching banks in the short term.

timmer3

Graham wrote: »

Unless you have some very specific/specialised banking requirements, they are all much of a muchness. Your history with your current bankers MAY come in useful in the future.

that's a very good point, despite my experience telling me that it won't make any difference.

Graham wrote: »

If you are already in the IT business, the amount of time you've already spent thinking about this has already costs you more than any potential saving you might make by switching banks in the short term.

i've spent about 2 hours researching this. being self employed is great but i could never worry about spending my time on something other than getting a full deck of billable hours! life is too short for that in my view it's an important decision and well worth putting a bit of time and effort in to. appreciate all the replies and different perspectives.

Duckett

bank offerings are all very much the same these days - a relationship that understands your current and future needs is your best bet. If your rm does not understand your business then look for a replacement - i.e. some one who will champion your cause - branch level relationships are weak so try if you can to establish a relationship with an rm with experience in sme / business banking. All the banks slice and dice their prospective customers and then naturally concentrate on those they feel will deliver profits for the bank. A good RM can help you if he or she believes your operation will grow revenues and also staff numbers. AIB are fine and I would suggest you establish a relationship at sme banking level. Good luck

Graham

Ultimately you are likely to find this is all completely academic.

Pet peeves aside, if your main requirement is to secure a €10k overdraft facility you will end up going with whichever bank offers it (if any) with the least onerous terms. Keep in mind that you're essentially talking about a new business with zero track record.

cob1

AIB charge 250/year for online banking, don't know if others do. it seemed reasonable when I started out years ago, but nowadays seems ridiculous to charge for something that means I don't come clog their branches for day to day transactions.

just pete

I have a ltd company registered 2 years ago and set up my bank account with AIB as I was banking myself with them. The company is only starting to get going now and will be next year before its in any sort of healthy position.
I got a letter just before christmas eve saying that they will be applying their fees from Feb onwards. €100 per qtr and €250 for online banking. That means it will cost me €650per year for them to keep my <5k. I will get rid of the online banking and que up at the cashier's desk when I need to transfer funds from now on.
But even still its too much for me to pay that much out of a small amount that the company has at the moment.
Has any other Banks got lower fees for minding my money? :rolleyes:

srsly78

You are mad to want a business account OP. Will just attract fees of e500/year or more. Yes there is a free period of maybe 2 years, but they fleece you after that. Stick with what you have!

And no, there is no good offering for small business - they will all rob you. Use a personal account if you can get away with it (Revenue do not mind but bank does).

tomahony

I would warn you to stay away from BOI for the moment until they update their online banking. I laugh out loud every time I try to use it. It is genuinely the worst web application I've ever encountered. I've just spent an hour trying to simply move money from my current account to VAT account and still no luck.