Banking Woes for Business Account

stressless

Ill try and make this as short and as straight to the point.

I had a credit union loan of about 18k, left Ireland 3 years ago to work in the UK and shortly after arriving i invested 9k in stocks from a well known company.

So Cu loan was being maintained for the next year and 1/2, then the company i worked for went belly up, got laid off and returned home to Ireland to save cash, CU were taking 550/month from me and i soon started getting into arrears.

For the last 15 months i have been working on a business idea, this has finally come to fruition and the company was formed last week and already there is 65k of revenue on the books till the 2nd w/end in October.

I cashed out my stocks to provide capital for the start-up so i am completely self sufficient, all the items needed to operate the business have been payed for.

I don't have any other loans bar the CU, i have never had a credit card, no mortgage.

My arrears are at 8.5k, 2 months ago they finally agreed to let me pay a lower amount, they did not bring me to court or anything and i have prepaid the monthly repayments for the next 6 months.

I approached the bank for a business account, don't want any loan, no credit card, no OD, just a basic business account where i can process payments (already have 3.5k from services provided over the last week). I cant see how there would be any risk to the bank.

Here's my problem, because of my arrears with the CU the bank will not give me an account untill they are resolved.

This is my catch 22 situation, i plan to completely pay off my arrears within 3 months once payments start coming in but i cant take in payments untill i have the bank account, i also cant get a VAT number untill i have a bank account.

To say i am completely frustrated is an understatement, i had my doubts about a start-up in Ireland but wanted to help do my bit to try and get the economy back on track but have experienced nothing but red tape.

I am a grafter, i have never claimed the dole even though i would be entitled to it (no offense to anyone on welfare intended), i love my country but when they put road block after road block in front of people it is soul destroying.

Any advice on what i can do apart from paying off arrears up front. I need that cash for cashflow for the next month.

barura

Have you considered trying a different bank? Or even using your own personal bank account until your arrears are in order? Keeping track of everything, I can't see it being a problem.

stressless

I tried a second bank today. The commercial manager was a gent and saw how viable the business is but like the first bank he too said that any personal financial issues may go against the granting of the account. He did however say he would be recommending that the account be granted and i will know within 48 hours.

The first bank also said this but he said since the credit crash, HQ in Dublin have to approve everything and any slight issue will result in a refusal.

I had Purchase Orders from clients in excess of 11k to show both of them. The profit margin for those four particular orders was 64%.

My personal bank account is not an option as it is a Ltd company i have formed.

J.Ryan

Since the Credit Union did not take you to court, how do the bank know about them?

Ask for a deposit account for the business, with online banking and an ATM card you should manage until they see what they could be losing.

What bank is your personnal account(s) with, perhaps you should try that bank.

Bring in the cheques you have when you talk to the next bank official, show them you haves funds to lodge.

stressless

J.Ryan wrote: »

Since the Credit Union did not take you to court, how do the bank know about them?

Ask for a deposit account for the business, with online banking and an ATM card you should manage until they see what they could be losing.

What bank is your personnal account(s) with, perhaps you should try that bank.

Bring in the cheques you have when you talk to the next bank official, show them you haves funds to lodge.

My particular credit union is registered with the Irish Credit Bureau so all details of arrears are available via a search.

I tried my personal bank today, BOI, my personal account gets little to no use, however it is not overdrawn. For the last 3 years i have been using my International HSBC account that i got whilst living in the Uk, i kept it because of the Visa Debit Card however as this is not an Irish bank they don't care about its balance etc..

I was prepared to lodge 6k in cash to both banks, they didn't seem to care.

I think my only option at present it to accept cheques only from my clients and hope that the issue with the bank can be resolved soon, not the most professional way to deal with clients but needs must i suppose.

J.Ryan

Just throwing these out now without considering them fully

1) incorporated a UK Company and set up a UK Bank Account deisgnated in €

2) perhaps you can set up a bank account in € with an UK bank without having to set up a UK company

3) Ask the Credit Union for a letter stating that you are no longer in arrears

4) Explain to whichever bank official you see next that you don't want any credit facilities for X months.

5) Ask your accountant or solicitor to talk to their bank

6) Ask the bank to provide a written reason for their refusal to allow you to open an account that does not require any facilities, then go to the financial regulator (I'm not sure if they can compell a bank to deal with you, but, don't ask don't get).


Banks are screaming for funds for deposit, even offer to open a 30 day notice deposit account, I can't understand this attitude they have

JD Dublin

OP your story is an interesting one, but one that shows we are back to the old ways of doing business in Ireland. Obviously all the banks are in lock-step on this one, incredibly refusing to open what is effectively a deposit account. Unbelievable.

Rant over.

Have you tried the EBS? I have no connection with them but I found them good, in that they will open an account for you etc. Mind you I havent tried to open one recently, although I did have a limited company account at one stage with them without a problem.

The EBS cheque clearance system is very slow, which is a bit of a pain. On the plus side they will issue cheques for you without charging - I believe this is to change soon. You can get an account with a deposit book so that you can track the amount you have in the account at any time.

I am not sure if you can use the new banking regulation to force a bank to open an account for you. Not the best start in what is an imoportant relationship, forcing a bank to open an account for you, but you could always switch banks when you are up and running.

Good luck.

Nuttzz

If you register as a sole trader you can get a VAT number and use your BOI personal account to accept and make payments until your credit union issues are sorted, then get a business account.

ezspeeder

Tough situation. As you are a limited company and trying to open a company account, is there anyone else in your business that does not have the arrears issue that could be the name on the account? Brother, sister, parent, whatever?

Sounds like a nice business though

Mr. Presentable

The bank's point of view is understandable to be honest. You have a debt elsewhere and are looking to start another. B1tch of a situation, you have my sympathy.

So, what you need to do is clear the CU loan, however you can: Sell the car, borrow from a relative, or.....

As your business idea seems so sound, get an investor on board, ie, sell some of your company.

NCG

OP, that is very strange. I have got bank accounts opened for clients with serious debt problems. It usually requires a manager's recommendation and needs to be cleared by regional or head office but, once no credit facilities are required, it is usually okay. J Ryan's recommendations above are worth following.

I can tell you though that you do not need a bank account to obtain a VAT registration number. VAT refunds will only be paid into a bank account, but that may not be an issue for you (or at least you can still have your repayments processed and just await payment). If you are referring to the part of the TR2 form that requests bank details, just complete it with "to be provided".

J.Ryan

Mr. Presentable wrote: »

The bank's point of view is understandable to be honest. You have a debt elsewhere and are looking to start another. B1tch of a situation, you have my sympathy.

So, what you need to do is clear the CU loan, however you can: Sell the car, borrow from a relative, or.....

As your business idea seems so sound, get an investor on board, ie, sell some of your company.

eh? read the OP again

stressless wrote: »

....I approached the bank for a business account, don't want any loan, no credit card, no OD, just a basic business account where i can process payments (already have 3.5k from services provided over the last week). I cant see how there would be any risk to the bank....

Just another thought, have you tried one of your local TD's or even Joe Duffy?

Mr. Presentable

J.Ryan wrote: »

eh? read the OP again

Even after reading it three times I couldn't process it correctly. Off home for me (:

J.Ryan

Mr. Presentable wrote: »

You read it. He owes a CU money which is mitigating against him getting a loan at a bank.

Read the bit I've highlighted from the original post.

stressless

ezspeeder wrote: »

Tough situation. As you are a limited company and trying to open a company account, is there anyone else in your business that does not have the arrears issue that could be the name on the account? Brother, sister, parent, whatever?

Sounds like a nice business though

My father has offered to put his name on the account so this may be the only solution.

Mr. Presentable wrote: »

The bank's point of view is understandable to be honest. You have a debt elsewhere and are looking to start another. B1tch of a situation, you have my sympathy.

So, what you need to do is clear the CU loan, however you can: Sell the car, borrow from a relative, or.....

As your business idea seems so sound, get an investor on board, ie, sell some of your company.

Yes i have a debt elsewhere but i do not want to start another, only need the bank to process payments, my business is fully financed after i cashed out stocks i bought before i got laid off.

I could pay off my debt in the morning if i wished but then i would have no cashflow to pay my crew or put diesel in the vehicles, a catch 22 situation.

NCG wrote: »

OP, that is very strange. I have got bank accounts opened for clients with serious debt problems. It usually requires a manager's recommendation and needs to be cleared by regional or head office but, once no credit facilities are required, it is usually okay. J Ryan's recommendations above are worth following.

I can tell you though that you do not need a bank account to obtain a VAT registration number. VAT refunds will only be paid into a bank account, but that may not be an issue for you (or at least you can still have your repayments processed and just await payment). If you are referring to the part of the TR2 form that requests bank details, just complete it with "to be provided".

My current attempt at opening an account is with the local branch who knows me personally as well as my family, hopefully that may do the trick.

Cheers for the heads up re the VAT.

J.Ryan wrote: »

eh? read the OP again



Just another thought, have you tried one of your local TD's or even Joe Duffy?

One of my good friends is a senior adviser to a front bench FG minister, he is gonna take it up with the relevant minister if i cant resolve the problem. I will have no problems making this issue known within the media circles.

Thanks for all the replies guys, back off to work for me now, the joys of self employment :cool:

stressless

Crisis over, Bank of Ireland sorted me out.

Cheers for all the advice.

TylerIE

stressless wrote: »

Crisis over, Bank of Ireland sorted me out.

Cheers for all the advice.

Glad to hear.

Thanks for coming back to let us know.

J.Ryan

TylerIE wrote: »

Glad to hear.

Thanks for coming back to let us know.

+1

Good luck with the business now