Our evaluation(4.3/5)
Starling Bank’s business account is a full current account operated from an app.
Features
  • Company: Starling Bank Limited

  • Type of account: Business current account

  • Intended for: Limited companies or sole traders

  • Overdrafts: Available

  • Loans: Available

  • Monthly fee: None

  • Debit card: Included (Mastercard)

  • Credit card: Not yet available

  • IBAN & BIC: Included

Starling Bank
To sign up, follow the link below and download the app on your phone. Follow the on-screen prompts, take a picture of your ID, submit and await approval. It usually takes less than a day to be accepted.

Starling Bank is a fully-fledged, UK-based bank without physical bank branches. Instead, you manage your account almost entirely through a mobile app.

Starling offers current accounts for private individuals (personal accounts) and current accounts for sole traders and limited companies (business accounts). We focus on the business accounts in this review.

Starling offers two types of business current accounts in GBP currency:

Business account: Bank account for limited companies and other registered business entities.

Sole trader account: Bank account for sole traders, self-employed and freelancers without a registered company.

You can also add a Euro or US account, but only after creating one of the above Business accounts. Each account comes with a:

  • UK bank account number and sort code

  • IBAN and BIC for international transfers

In contrast with high street banks, the sign-up is done entirely through the mobile app.

Is Starling Bank safe? Yes, up to £85,000 of your money is protected by the Financial Services Compensation Scheme (FSCS) in each account. Starling Bank’s security is top-notch, using a combination of biometric identification measures, fraud prevention tools, a human support team and more to keep your money safe. It has all the proper licences in place so that it is legitimately a real, regulated bank – just managed remotely.

There are pros and cons of Starling Bank influencing how good of a fit this bank account is for your needs. Let us go through the requirements, costs, features and services on offer.

Who can open a Starling Business account?

To open a Starling business account, there are certain requirements. You will need to be a resident in the United Kingdom and have a UK phone number for registration, though Starling may allow non-UK numbers from certain countries.

Limited companies and other types of businesses or partnerships have to be registered at Companies House in the UK. Only a ‘Person of Significant Control’ can open an account for a registered company, and that person should be a UK resident. Sole traders must also live in the UK and be registered as self-employed.

Only the account owner or Persons of Significant Control may use the account, so you cannot just give the business debit card to staff members. It is not possible to open an extra bank account for the same business, only a new business account for another registered business entity.

Costs and fees

While competing neobanking platforms offer tiered price plans (from free to “premium” plans), Starling’s costs are piecemeal according to what services are used.

The Business accounts for sole traders and limited companies have no monthly fees. Optionally, you can subscribe to an additional feature package called Business Toolkit for £7 per month.

There is no setup charge, and you receive the debit card free of charge after you’ve had the account approved. Starling does not currently pay interest on any business current account, only on their personal current accounts (but there is no Starling savings account).

Business account for limited companies & sole traders Charges
Account creation Free
Monthly fee Free
Business Toolkit add-on £7*/mo
Interest rate None
Debit card Free
Faster Payments bank transfers, Direct Debits, Standing Orders (UK only) Free
ATM withdrawals (UK & abroad) Free
Cash deposits 0.3% (min. £3 charge)
Cheque deposits Free

*Includes VAT.

Business account
for limited
companies &
sole traders
Charges
Account creation Free
Monthly fee Free
Business Toolkit add-on £7*/mo
Interest rate None
Debit card Free
Faster Payments bank transfers, Direct Debits, Standing Orders (UK only) Free
ATM withdrawals (UK & abroad) Free
Cash deposits 0.3% (min. £3 charge)
Cheque deposits Free

*Includes VAT.

It is free to withdraw cash from a cash point in the UK and abroad, though you are not exempt from charges that individual ATMs may add. Cheques are free to deposit through the app or Freepost (by letter), but cash deposits at the Post Office cost 0.3% of the cash amount, where a minimum of £3 is required.

Then there are costs for overdrafts or business loans. Starling offers a business overdraft that depends on your situation and qualifying factors within the limits and interest rates below.

Overdrafts Limited companies Sole traders
Available overdraft limits £250-£150,000 £250-£10,000
Interest rate 5%, 10% or 15% EAR (variable) 15% EAR (variable)
Annual fee (paid upfront) 1.5% (min. £50) of agreed limit None
Over-
drafts
Limited
companies
Sole
traders
Available overdraft limits £250-£150,000 £250-£10,000
Interest rate 5%, 10% or 15% EAR (variable) 15% EAR (variable)
Annual fee (paid upfront) 1.5% (min. £50) of agreed limit None

Business loans are only offered to business accounts for limited companies, not sole traders. The following limits and interest rates apply to loans.

Loans Limited companies
Loan limits £5,000-£250,000 (1-5-year terms)
Interest rate 7% EAR (variable) for loans below £25k, bespoke EAR above £25k loan
Early repayment fee None
Loans Limited
companies
Loan limits £5,000-£250,000 (1-5-year terms)
Interest rate 7% EAR (variable) for loans below £25k, bespoke EAR above £25k loan
Early repayment fee None

Whether there are annual fees or other charges associated with a business loan is communicated to you when the loan application has been reviewed. Starling claims there are no hidden fees, but it is always good practice to read the small print before accepting a loan.

Transfers and use abroad

What about international payments, foreign currency and use abroad?

The Business and Sole trader accounts can only contain and receive British pounds. Bank transfers to another UK-based GBP account are free to do. That said, the business debit card can be used for payments in any currency without added fees.

A Euro bank account and US dollar bank account are available as add-ons after a Sole trader or Business account is set up. They come with their own US or European IBAN and SWIFT/BIC, acting as standalone bank accounts. The US account has an ACH routing number too. There are no options for accounts in other currencies at the moment but Starling Bank is working on adding 21 other foreign currency accounts.

If your client sends a EUR payment to your GBP account, a 2% charge will be added by Starling Bank on top of the real exchange rate to convert that currency into GBP. It is not possible for your clients to send any other currency (including USD) to your GBP account – instead, it will be rejected and sent back to the payer. In the same vein, the Euro account can only receive euros and the US account can only receive US dollars. Inbound transactions in other currencies will be rejected and sent back to the payer.

For that reason, you should make sure that international clients know which currency to bill in. Moreover, connecting banks along the way make charge fees for processing that are outside of Starling’s control, but Starling does not charge for receiving international payments as long as the currency sent matches your account’s.

Sending/receiving money Charges
Business debit card transactions in foreign currency No Starling fee applied, but local fees may apply
Euro account, monthly fee £2
USD account, monthly fee £5
Inbound payment in same currency as account Free
Inbound EUR transfer to GBP account 2% on top of real exchange rate
Transfers between EUR, USD & GBP accounts 0.4% on top of real exchange rate
International outbound transfers – currency conversion fee 0.4% on top of real exchange rate
SWIFT outbound transfer – delivery fee £5.50
International outbound transfer via local partner – delivery fee From 30p
Sending/
receiving
money
Charges
Business debit card transactions in foreign currency No Starling fee applied, but local fees may apply
Euro account, monthly fee £2
USD account, monthly fee £5
Inbound payment in same currency as account Free
Inbound EUR transfer to GBP account 2% on top of real exchange rate
Transfers between EUR, USD & GBP accounts 0.4% on top of real exchange rate
International outbound transfers – currency conversion fee 0.4% on top of real exchange rate
SWIFT outbound transfer – delivery fee £5.50
International outbound transfer via local partner – delivery fee From 30p

There is a £2 monthly fee for the Euro account charged as a monthly subscription that can be cancelled any time. Inbound and outbound SEPA transfers are free from the Euro account. The USD account costs £5 per month and can also be cancelled any time. You can send and receive US dollar transactions for free.

You can also transfer money between your Starling Euro, US and GBP business accounts, which involves a currency conversion fee of 0.4% on top of the real exchange rate. If you regularly receive euro transactions from clients, you can therefore save a lot of money by adding a Euro account to receive free transfers. If you need to move that money to your Business (GBP) account, it is cheaper with the 0.4% currency conversion fee between Starling accounts than to receive euros directly from clients into the Business account which would cost 2%.

The free SEPA transfers with the Euro account and free USD transactions with the US account are really useful for those with clients paying in these currencies. The accounts can also save you money if you travel regularly in Europe or the US and want to avoid the risk of merchants applying their own fees to currency conversions. Starling does not apply a fee when you use the debit card in another currency, but the merchant may use their own exchange rate with additional fees if you choose to pay in the local currency.

The Euro and US accounts do not come with a separate debit card. Instead, the accounts are attached to your Business bank account, even though the different currency balances are separated in the app.

To use the euro or dollar balance with the Business Mastercard, you have to switch on the relevant currency in the card management section of the app. The card will then automatically use e.g. the euro balance for euro transactions and pound balance for pound transactions.

Image: Starling Bank

Starling international transfer

Transfer directly from the app.

For example, if you’re in the eurozone and buy something in a shop, the euro account will be charged automatically. When you get back to the UK and use the card in a shop, the British pounds balance will be used automatically.

You can transfer money between the Business, Euro and US accounts 24/7 including weekends. The exchange rate will be shown to you before the conversion is processed. If you’re doing the transfer during a weekend, an estimated exchange rate will be shown – unless you wait until Monday for the real exchange rate.

It is currently possible to send money to any of 38 countries and 20 currencies. One major economy, China, is missing from this list, but Starling is gradually expanding the options (Australian and Canadian dollars are not added yet, but coming soon). You can choose to set the amount that the payee has to receive, or an amount that the transfer fees are deducted from.

The app gives you different transfer options with different fees disclosed upfront depending on the speed and method of transfer. Starling adds a currency conversion fee of 0.4% to the currency exchange rate. With the local delivery option, Starling adds a flat delivery fee of 30p and a currency conversion fee of 0.4% of the amount being transferred.

That said, Starling Bank cannot control if there are any additional charges added somewhere between yours and the receiver’s account because of Starling’s reliance on external third party providers or inter-banks to process the transfer.

Which is better for international transfers: PayPal or TransferWise?

What’s special about the debit card?

Though Starling Bank does not offer credit cards yet (they’re planning to add it as an option), the Starling Business Debit Mastercard comes free with the business account.

Starling Bank Business card

Starling Business Debit Mastercard

The debit card is managed in the app or desktop account, and I’ve got to say: the card controls are superb compared to the high street banking apps. There is a dedicated section for card settings and information related to the card. Here, you can add the card to your Apple Pay, Fitbit, Garmin Pay, Google Pay, Samsung Pay wallet, cancel and replace the card, get a PIN reminder, and view limits for transactions, ATM withdrawals and mobile wallet payments.

If you lose your card but are not sure whether it’s stolen, lost or misplaced, you can simply lock it via a toggle in the app and unlock it if you found it down your sofa. In many other banks, you can only cancel a card, then wait some days to receive a new one by post.

Moreover, the Starling app gives you options to lock specific types of transactions like card machine or online payments, ATM withdrawals, mobile wallet payments, swipe card and even gambling payments.

If you switch on location-based fraud protection, the app uses the location of card transactions to determine whether the card has been stolen, thereby preventing fraudulent transactions.

Cash and cheques

Does your business deal with cash? No problem. You can deposit cash in any Post Office as long as you have the Business Mastercard. Just hand the banknotes over at the counter, insert the card in the card terminal, confirm the amount deposited and the money will appear in your Starling Bank account immediately.

Note that business account holders pay a charge of 0.3% (minimum £3) per deposit. The maximum amount that can be deposited in one go is £20,000 with a maximum of £250 in coins.

Photo: Starling Bank

Starling Bank cash deposit

Deposit cash at the Post Office by inserting the card, confirm and the money will be in your account.

You can withdraw cash for free from an ATM up to six times a day, but the daily total cash withdrawal maximum is £300. If you take out cash from a Post Office, it costs 50p per withdrawal.

Cheques can be deposited in the app without having to go to a Post Office. In the ‘Add money’ money section of the app, you take a photo of the cheque, then await clearance in your account which normally takes two working days. The maximum cheque amount permitted through the mobile cheque imaging feature is £500, but you can post higher-amount cheques with Freepost to Starling Bank.

Business loans and overdrafts

Starling Bank does not offer credit cards yet, but have announced their intention to do so in the near future. In the meantime, those in need of a cash injection can apply for an overdraft or business loan. But note: Starling has currently paused applications for their own business loans so the bank can focus on providing the government-facilitated coronavirus loans.

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 (up to £250k) than sole traders (up to £10k). Depending on Starling’s assessment of your company, limited businesses get an EAR (Equivalent Annual Rate) of 5%, 10% or 15% EAR (variable), where 10% EAR is representative. The interest rate for sole traders is 15% EAR (variable).

A new addition to the terms now state that Starling Bank will charge an interest rate based on different factors such as information from several credit reference agencies.

For Business current accounts, a setup fee of 1.5% (minimum £50) of the agreed overdraft limit is charged at the beginning, which is also the annual fee that will be charged the same time the following year. The interest is accrued daily and charged the following month on the 15th – the Starling app will tell you how much this is. It is also possible to change the overdraft limit directly in the app through a handy overdraft slider, which is way more flexible than traditional banks allow.

Thought about a cash advance? 10 best cash advances in the UK

What about loans? The same eligibility criteria apply, but only a Limited Company or Limited Liability Partnership can apply for a business loan – sole traders, charities, trusts and partnerships cannot.

The loans on offer are between £5,000 and £250,000 for a term of 1-5 years, with a representative fixed rate of 7% APR for loans up to £25,000. The loan applications are reviewed by real people, not automatically through an algorithm. The monthly repayment date is decided by you, but loans of less than £25k have a fixed repayment amount.

Business Bounce Back Loan and CBILS: available

Businesses struggling due to coronavirus can get a much-needed cash injection from the government’s Bounce Back Loan Scheme (BBLS) or Coronavirus Business Interruption Loan Scheme (CBILS) through Starling. To apply for BBLS, you need to have a Starling Business or Sole Trader account, while CBILS is only available to limited companies and LLPs.

With BBLS, you can borrow between £2,000 and £50,000 up to a maximum of your 25% annual turnover with a fixed 2.5% rate of interest. The BBLS loan term is six years where during the first 12 months, the interest will be claimed by Starling on your behalf from the government, i.e. the first year is interest-free. You don’t have to make any repayments during these 12 months, but you’re free to repay the loan early any time with no early repayment charge.

The CBILS is for higher amounts, with loans and overdrafts ranging from £50,001 to £250,000.

These loans require that your main business account is with Starling Bank. In addition, you cannot apply for the same loan through other providers, and using other coronavirus-related business loans may affect your eligibility.

Starling Bank app

Since your account is managed through the app (or a more limited Desktop for Business in a browser), it’s quite important the app has all the functions you need. From our testing, we were not disappointed.

The mobile app can be used on Android devices, iPhone, iPod Touch and iPad and not on a computer. The user experience is polished with enough features to explore even with a new account that hasn’t properly got started yet. Customer support is always available directly from the app.

These are the main app sections:

  • Home: Visual overview of money spent today and this month

  • Payments: Request and send money, and view direct debits, subscriptions and standing orders

  • Spending: Details of payments by merchant or category

  • Card: Card settings and information

  • Spaces: Visual spaces for each thing/goal you’re saving money for

Image: Starling Bank

Starling app Spaces

‘Spaces’ section in app.

The Spaces feature is genuinely useful for working towards goals. Basically, you can allocate money for individual things you want to save money for, e.g. a new laptop or a business trip, or the loans you have with Starling.

A setting lets you automatically save money from the main balance by rounding up each transaction to the nearest pound (or more), sending the surplus pennies to an allocated goal.

The money placed within a goal is not part of the visible balance of your account or debit card, but it is still in your bank account. This way, you do not dive into money reserved for a goal when using the debit card, and it becomes easy to see what money you’re allowed to spend by not having the saved money in the main app balance.

At any time, you can transfer money from Spaces back to your main balance.

Image: Starling Bank

Home screen in app.

It’s easy to switch between Starling accounts in the top left corner on Apple devices or top right corner on Android devices. If someone else nearby uses the Starling app, you can wirelessly connect with that person to get paid by them. Alternatively, just check your bank account details in the app to share them with others.

Move everything from your previous bank to Starling through the Current Account Switch Service directly from the app if you want to make a complete switch to Starling Bank after testing the service. Any other admin tasks can be done in the app, such as changing account details, applying for an overdraft, adding a new account, managing subscriptions and more.

There is also an online banking platform accessed in a web browser, but this has fewer features than the mobile app. It’s clear that Starling is developing this, though, as they have acknowledged that some admin tasks are just easier to do on a desktop computer.

Business Toolkit, accounting and integrations

What about the Business Toolkit? This is an add-on for £7 monthly that is particularly useful for freelancers, the self-employed and small businesses without an accountant. It has advanced accounting, invoicing and bookkeeping features available through the online account (not mobile app), including:

  • Invoice management incl. sending invoices directly from bank account

  • HMRC tax estimation for sole traders

  • VAT records and calculations

  • Connect to HMRC to submit VAT return via Making Tax Digital

  • To-do list for bookkeeping

  • Upload bills, track expenses and schedule payments

Alternatively, there are 14 financial software integrations to connect with through the so-called ‘Marketplace’. These are external platforms or apps that Starling Bank has partnered with for a seamless integration with your business account.

For accounting features, you can choose between a FreeAgent, QuickBooks and Xero integration. If you don’t want an additional accounting subscription, it’s possible to export bank account statements to a PDF or CSV file through the app or online banking account in a web browser. Expenses can automatically be grouped into categories in the app to simplify reporting, and you can track payments with push notifications from the app.

Image: Starling Bank

Push notifications help you monitor transactions in your account.

The other app integrations available are CyberSmart (security), Digital Risks, Nimbla and So-sure (insurance), Flux and Tail (receipts and loyalty), Growth Street (lending), Molo (mortgages), PayStream (taxes), Sparqa Legal (legal) and UnderPinned (project management).

Customer service and Starling Bank reviews

Starling Bank provides round-the-clock UK-based support even on weekends. You can call the support team, email or chat with support through the app, and there’s a help section online answering the common questions people have about each product.

I tested the in-app support chat after there was a mistake in my name on the debit card received, and although the queue time was over 20 minutes, once I got through, the help was to-the-point and the issue got resolved right away. Asking questions on the website chat yielded a faster response, but the extent of delays will depend on the time of day.

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

Starling Bank won the ‘Best British Bank’ award alongside ‘Best Current Account Provider’ and ‘Best Business Banking Provider’ awards in 2020, plus they are rated highly for customer satisfaction.

Like any other financial institutions, there are customer reviews indicating 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 issues indicating systemic faults with the bank.

There are several cases of businesses opening a new account and being unhappy with having to provide various documents to verify their company, and 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.

Signing up

The Starling Business account sign-up is very streamlined and for most people, it is quick (maybe 10 minutes). The only downside is that you can’t go back a step, so whatever you submit on one screen cannot be edited again during the application steps.

You need a picture ID which has to be a passport, UK driving licence (full or provisional), EU/EEA ID card or UK Residence Card. Some applicants may also need to provide additional documentation such as invoices, payslips, accountant’s letters or bank statements to prove the nature of their business. During the sign-up, you will be asked to do a short video recording on your phone of yourself saying a sentence in order to verify your identity.

During the sign-up, sole traders are required to create a personal Starling account before adding a sole trader account through the app after being approved. Limited companies and partnerships can create a business account without a personal Starling account attached.

Signing up will prompt Starling to do a soft credit check, which won’t affect your credit score or be visible to other financial service companies.

Approval takes less than a day in most cases, after which you can use the account straight away. The business debit card takes a few working days to arrive after that. Sole traders will receive two separate cards, one for the personal account and the other for the business account. For us, the cards arrived only two days after signing up.

Our verdict

Our overall experience of Starling Bank was positive from the beginning. The app is user-friendly – clearly developed to be best-in-class. The queue for the chat support could have been faster, but always got us through to a real person who answered our questions or fixed the issue. We like their values of transparency and fairness, which shine through in their communications with customers.

Starling is clearly a real bank with options for loans and overdrafts, but there are still services and products that can be added. For example, not being able to send money to Canada, Australia and China could be an issue for some, and sole traders are not able to get a loan, only an overdraft. The lack of credit card could also prevent some businesses from making a complete switch to Starling Bank.

You should only choose Starling Bank if you’re happy banking through an app. It’s possible to do some things in a browser, but most features rely on using the app.

On the other hand, Starling is constantly adding new features and services, so it will only be a matter of time until the offering is broader, more like the big high street banks. The ease and speed of opening an account certainly makes it worthwhile to try it as an additional account to e.g. manage money for “goals” or expenses.

If you’re dealing a lot with euros or US dollars, it’s definitely worth considering the Euro or US account, as it saves you conversion fees while providing full control over how the different currency balances are used. The debit card controls for the accounts are more sophisticated than any we’ve seen elsewhere.

All that being said, you should only choose Starling Bank if you’re happy banking through an app. It’s possible to do some things in a browser, but most features rely on using the app. This could be bad news for those with an old (or no) phone, but entirely natural for others.

Pros

  • Fully licensed and regulated bank

  • No monthly charge for Business account

  • Competitive fees for transfers and payments

  • Euro and USD accounts available

  • Genuinely useful app features

  • Advanced debit card controls

  • Great customer service

  • Cash deposits available (not a given for online banks)

  • Useful bookkeeping features through Business Toolkit

Cons

  • Starling loans not available for sole traders

  • No credit card available

  • Cannot send money to certain countries

  • Web banking features not the same as in app

  • Cannot share account with staff except for Persons of Significant Control

Name of Reviewed Item: Starling Bank Business Account Rating Value: 4.5 Image: https://www.mobiletransaction.org/wp-content/uploads/2020/04/starling-bank-business-account-uk.jpg Review Author:Review Date: