Starling Business Account Review– how does it compare?

Starling Bank Business account review 2021

A lot of small business owners these days are struggling with how to manage their finances. In the past, most would use an online bank account or a savings account for day-to-day expenses and then have one or two credit cards to cover more significant purchases. 

But in recent years, new challenger banks like Starling have emerged that offer different ways of managing money.

In this Starling Bank Business account review, we will discuss everything this challenger bank has to offer and if you should switch from your high street bank.

What is Starling business banking?

The business account is an online banking service that Starling Bank created. The business bank accounts is just one of the products provided to customers who are running small businesses.

Starling launched its business proposition in 2018, making it one of the first mobile banks to offer business banking.

The business banking philosophy offers free, uncomplicated, and quick business banking with no fees to open.

With a business account, you can open it from your mobile phone in just 10 minutes, making it an excellent option for small business owners who don't have time to go to the bank and fill out many forms!

Is Starling bank legitimate?

Is Starling Bank's business account safe?

Starling Bank says keeping your money and personal details safe is its most significant priority. It uses 3D secure when users are making purchases online. Instant notifications allow you to check for fraudulent activity on your account.

In-app allows you to stop anyone accessing your account should it be lost or stolen. In addition, your money is protected up to £85,000 with the services compensation scheme FSCS.

If you are worried about fraud you can also instantly freeze your MasterCard debit card and details by using the app.

Is Starling free business account good?

Starling offers many benefits tailored to the type of company you have, making it a perfect account for businesses. And it's good to note that the monthly fee for a business is free!  

There are also multi-currency accounts that are perfect for businesses that deal in multiple currencies, which we go through later in this article.

Here are the different accounts offered:

- Sole Trader 

- Limited Company

- Multi-currency

Multicurrency accounts

Starling allows you to hold a US Dollar or Euro account as an addition to your existing, these are charged as add on.

Euro account £2 a month

If you operate in the EU, a euro account could be a good idea. For this type of account, you pay £2 a month. For this charge, on top of the benefits of a standard business bank accounts, you can:

• Exchange and hold euros
• Use a single debit card to manage your EUR and GBP currencies.
• Secure transactions: The euro business bank account comes complete with its unique IBAN. And because Starling is a fully licensed bank, all your eligible deposits are covered to £85,000 (or equivalent) by the Financial Services Compensation Scheme.
• Transfer money between your GBP and EUR accounts 24/7, even at the weekends. You'll always see the exchange rate before the conversion is made, so you have the option to wait until Monday morning.

US Dollar £5 a month

If you want to send and receive US dollar then this additional add on could be right for you. Here is what you get for £5 a month:

• Hold and receive US currency with transparent rates
• Use your regular business card; no need to faff around with two.
• Your business USD bank account will come with its unique account number as well as an ACH routing number. And because it is a fully licensed bank, all your eligible deposits are covered to £85,000 (or equivalent) by the Financial Services Compensation Scheme.
• Same day payments: Transfer payments to the US same day via ACH (up to $25,000)

Good to know: The Euro and US accounts do not come with a separate debit card. Instead, the accounts are attached to your Business bank account. However, the different currency balances are separated in the app. You also get the advantage of a great exchange rate. 

Starling Business banking Card - What do you get?

Starling business comes with a Starling business debit card in the form of a MasterCard.

The business debit card is a simple way to get cash at an ATM, make purchases, or withdraw from your bank account for free in over 25 countries worldwide.

It's also compatible with Google Pay, Apple Pay, and Samsung pay.

The business debit card is designed to offer a secure way for you to spend your money without ever having to carry cash or worry about fraud.

If you happen to misplace your card (but are not sure whether it was stolen or if it's just somewhere tucked away, like on the sofa), you can simply lock your account via a toggle in the app. Once you find it again and unlock it, it will be ready and waiting for action 24/7.

In addition, the Starling app gives you options to block specific types of transactions like card machines or online payments, ATM withdrawals, mobile wallet payments, and swipe cards.

When you switch on location-based fraud protection, the app uses your card's location to determine if transactions are fraudulent, thereby preventing any potentially compromised transactions.

Starling Banking app

You can use the banking app on all Android devices, iPhone, iPod Touch and iPad. The app has all the functions you need to use to manage your account. The user experience is polished and easy to use.

Customer support is always available directly from the app. It's easy to switch accounts to Starling with the ability to wirelessly connect with someone else nearby to get paid by them.

There is also an online banking platform accessed in a web browser, but this has fewer features than the mobile app. Starling is also developing a desktop banking platform, but some admin tasks are easier on a desktop computer.

Here's what you can do in the app:

Lock or freeze your card

If you've ever lost or had your card stolen, you know how scary the experience is. You don't need to worry about scrambling around searching for your bank's phone number. If this happens with a Starling card, all you need to do is open up your app, tap the card, and lock the card. You can do it in seconds!

Instant payment notifications

Keep track of your business with instant payment notifications—a year-round view of your transactions and account balances. Also good to see any upcoming direct debits from the scheduled tab.

Spending insights

Get a detailed picture of your spending with account insights. You can track anything from everyday expenses to employee card use all in one place.

What's more, Starling's app also breaks it down into categories for you to easily see where your money is going.

Spaces feature - keeping your tax in check

The Spaces feature is genuinely helpful in working towards goals. You can allocate money for individual things you want to save money for, e.g. tax bills, or the loans you have.

A card with a round-up feature lets you automatically save money from your main balance by rounding up each transaction to the nearest pound, sending surplus pennies to an allocated goal.

The money set aside is not visible in your account balance or bank card, but it still exists in the account you created. This way, you do not need to touch the deposited funds while using your debit card, and it becomes easy to see how much you are allowed to spend without adding the desired amount into the main app.

You can always transfer money from Spaces back to your main balance.

Business loans and overdrafts - fee free?

Of course, all loans and overdrafts have a fee but Starling's are very competitive.

The following criteria usually apply for a business overdraft:

• You must have traded for at least 18 months.
• The sole trader/your business and all directors and partners should have a good credit history (i.e. no arrears or defaults)
• The sole trader or directors are over 18 years old.
• For a Limited Company or Limited Liability Partnership, all directors and partners must also be willing to provide a personal guarantee.

Limited companies can get a larger overdraft than sole traders. With limited companies up to 250k and sole traders up to 10k.

The interest rate for limited businesses is 5-15% EAR, depending on the assessment of your company by Starling. The interest rates for sole traders are 10 or 15%.

Starling Bank charges a setup fee of 1.5% (minimum £50) for an overdraft limit that is agreed upon before the year begins and charged annually in advance on April 15th, as well as charging interest daily at 10%. It also allows changing this overdraft limit with ease by using their handy slider to customize how much you want available or unavailable when your balance goes below zero.

Starling Business Loans

The loans on offer are between £5,000 and £250,000 for a term of 1-5 years. Loans with monthly repayments can be up to 7% APR or fixed repayment amount depending on the loan size. Loan applications are reviewed by real people rather than automated algorithms.

It's best to get the latest up to date information from Starling as of the time of writing they are only offering government-backed loans due to the COVID pandemic.

Starling Bank review - From others

Before you go with Starling business, you want to know that other people have had a good experience. After all, it is a vital decision who to trust your business with.

Here is a bit of reassurance that starling accounts mean business:

Trust Pilot

Trustpilot reviews are a good indicator of what people think about Starling, as you have to make verified purchases to review. As of writing, there are over 20 thousand reviews with an average rating of 4.4 stars.

To provide you with an idea of the number and quality of reviews that Starling has received compared to other major banks, I analysed all the banks featured on Trust Pilot. Not only does Starling rank at the top of both overall ratings and review count, but it also features a wide variety of card options for small business owners like you.

Like any other financial institution, customer reviews indicate the service is not perfect for everyone, but not (we think) to an alarming extent.

The negative reviews are about different issues that look like they have individual causes rather than a pattern of serious problems indicating systemic faults with the bank.

Several businesses open a new account and are unhappy with providing various documents to verify their company.

We noticed some cases of frozen accounts or payments in response to suspicious transactions. Banks commonly apply security protocols to keep their accounts safe, so this is not unusual to see in banking reviews.

Looking at TrustPilot, we see that Starling responds to individual complaints promptly with thoughtful responses, showing they are taking their service seriously.

Starling has won awards

Starling Bank won the 'Best British Bank' award alongside 'Best Current Account Provider' and Finder have awarded Starling for innovation and recognised that 97% of the customers they surveyed would recommend Starling Business. 

Starling bank business vs other Business accounts

Compared to other high street banks, Starling does fulfil its reputation as being one of the challenger banks.

Being free and having tons of easy-to-use benefits, the Starling bank business account does give you a lot to go for.

See below how the Starling bank business account compares with high street banks and other challenger banks:

Related Article: Monzo vs Starling

Based on basic accounts. All high street banks are regulated so no need to include in the comparision. 

**Trust pilot rating based on the business, some of the banks haven't claimed their accounts. 

Related article: Monzo vs Revolut

Is Starling bank good for business?

As mentioned above, Starling free business account is packed with features that make it very good for business. For sole traders and Limited companies, its benefits outweigh a lot of the competition.

A few of the features which I think make Starling great for business are:

Optional Starling Bank extras:

Starling business toolkit

The business account starling toolkit is an optional add-on. It will help you stay on top of your tax, invoices and bills with powerful money management tools, including budgeting features from as little as £7 monthly fees.

Related Article: Best Budgeting App UK

If you hate admin, these handy little add-ons could be perfect. Starling business toolkit keeps you on track by providing a nice-to-do list, so you always keep on top of your business admin.

What do you get with the business toolkit?

• Invoice automating: manage from your desktop when you get paid simply match your invoices in a single click.

• Email linking: You can link your Google, Outlook or Hotmail to your business toolkit so that you can issue invoices directly from your bank account

• HMRC Tax estimation: perfect for sole traders, you can estimate your self-employed tax and then use the spaces feature to set aside the money, meaning you are much less likely to get caught out.
• For limited companies, the record VAT on transaction feature is excellent to work out your VAT return.
• MTD VAT submission you can connect your account to HMRC and submit your VAT return through making tax digital

Is Starling bank account for business free?

For a regular account with no added extras, the Starling account is free.

Extra fees are listed below but are optional.

How to apply for a Starling Bank Business Account

To open a free Starling account is easy. You just need to have a good phone signal, some documents to hand, and 10 minutes to spare.

Starling bank business account eligibility

You're eligible for a Starling account if you meet the following requirements:

For a Sole trader account:

• UK resident
• Documents to support the nature of your business could include bank statements, accountant's letters, invoices, qualifications.
• Identity verification, options include passport, UK driving license, UK residence card

For limited company accounts, it's a little more specific:

• Must be registered at Companies house
• All directors to be UK residents
• The business must not be a holdings company, dissolved in liquidation, or engage in any activities.
• Meet fraud checks

Starling bank business account application process

The process to open an account is very easy all you need is.

• Smartphone (Click Open a Starling bank account to enter your mobile number and start the process)
• Valid ID listed above
• 10 minutes

Set up starling business account

Once your account is set up, you can start transacting the same day, even before your card arrives.

Starling business current account with bad credit

Even if you have bad credit, it is still possible to apply for a Starling Business account as long as you have not been involved in any fraudulent activity.

Review of Starling business banking account: Bottom line

If you're a small business owner with limited time to spend on managing your finances, Starling Business might be the solution for you. With some of the best customer service in banking and no hidden fees or charges, this award-winning bank is contactable 24/7 by phone and email.

It has been designed specifically for entrepreneurs like us who want quick solutions without sacrificing quality.

The only question now is will you switch? Have I convinced you yet? Let me know what questions are still lingering in the comments below!

Ready to Switch to Starling? Get a free business current account today

Are you looking for Starling Personal current accounts? Read Starling about Starling current accounts review here.