Overdraft Facilities
Having an overdraft facility helps cover your short-term cash-flow shortages. Overdraft facilities vary from bank to bank; some may not offer such a service to new customers while others will.
Loan Facilities
You may need additional capital to fund the acquisition of your pub or require finance in the future to further develop your business. Whether
they will help finance your business and what rates of interest they will charge, need to be considered.
Merchant Services
Accepting debit and credit cards is essential for pubs serving food. Today’s customer expects to be able to pay for meals using their plastic. Not being able to accept debit and credit cards is likely to adversely affect your food sales. In order to accept debit and credit cards you require a merchant account. Choosing a bank for your business account that can also provide you with a merchant account can make the process easier, but you can open a merchant account to be used alongside a business account from another bank. See the section, ‘How to accept debit and credit cards’.
Business Credit Cards
A business credit card is useful for making purchases. Some banks may require you to have banked with them for a period of time before they will issue a credit card to you for your business account. Enquire at different banks about this facility.
Opening A Business Bank Account
Once you have chosen your bank, you will have to complete an application form and provide details of your business and personal identification. You will need to open your business account prior to trading. This can sometimes cause difficulties where the bank needs to verify details of your new pub, which you haven’t yet taken on or even signed for. In this case, you will have to support your application with letters of offer, solicitors’ confirmations or correspondence from the brewery or pub company.
When opening your account, banks are likely to want to see the following:
- Letters confirming that you have been offered the tenancy or lease, or that you are buying the freehold of the pub.
- Copies of any tenancy or lease agreements.
- Your business plan.
- Certificate of corporation in the case of limited companies.
- A copy of any partnership agreement.
- Your driving licence or passport.
- Recent utility bills.
You will find it useful to open 2 types of account: a current account to deal with your day-to-day transactions, and an easy access savings account that you can use to set aside money to meet your VAT payments. You may also find it useful to open a second savings account where you can accrue money for longer-term developments or as a contingency fund.
Running Your Business Accounts
Running your accounts properly will build good relationships with the bank and keep costs down. Here are some tips:
- Abide by the terms of your bank accounts.
- Do not exceed your overdraft limit without prior agreement.
- Keep your bank up to date about your business.
- Notify the bank of any problems you are experiencing with the business.
- Check your bank statements regularly.
- Keep your bank records in an organised manner.
- Review your banking arrangements every couple of years to check that you are getting the best deal.
- Renegotiate terms with your bank as your business needs change.
- Use on-line banking and automatic transactions to keep bank charges down.
- Monitor your cash-flow requirements and plan for any anticipated cash shortages.
Safety And Security
As a licensee, you will be regularly paying cash into your bank. Unfortunately, there are people who may see this as an opportunity to rob you. To reduce the risk of this happening vary the times and days you take cash to the bank. This will make it harder for anyone to work out your routine and prepare to steal from you. Don’t make it obvious that you are carrying cash; instead put cash bags inside other, less obvious types of baggage, such as a small rucksack. If you travel to the bank by car, park your car as close to the bank as you can, reducing the distance you have to travel on foot. When you are travelling with money in a vehicle, lock your doors. This prevents anyone opening your doors and stealing from you while you are stationary or at traffic lights.