Lloyds vs Starling for business banking – What’s best? Comparing features, fees, pros and cons

When it comes to choosing a business bank account in the UK, Lloyds and Starling are two prominent names that often come up. Both banks offer a range of services tailored specifically for businesses, but they differ in various aspects.

In this article, we will compare Lloyds vs Starling for business banking, highlighting their pros, cons, key differences, costs, and other essential considerations, to help you make an informed decision.

Lloyds vs Starling

Features	Lloyds Business Banking	Starling Business Banking
Account Types	Business Current Accounts, Savings Accounts, Loans	Business Current Accounts, Sole Trader Accounts
Physical Branches	Extensive branch network throughout the UK	Digital-only bank, no physical branches
Digital Banking Platform	Available via website and mobile app	User-friendly mobile app, intuitive interface
Monthly Fees	Varies depending on account type and transaction volume	No monthly fees
Account Setup	Online and in-person	Online only
Relationship Managers	Dedicated relationship managers available	No dedicated relationship managers
Overdraft Facilities	Available, subject to eligibility and fees	Overdraft facilities offered
Lending Options	Wide range of business loans and credit facilities	Limited lending options
Integrations with Accounting Software	Supports integration with popular accounting software	Seamless integrations with accounting platforms
Payment Services	BACS, Faster Payments, CHAPS, International Payments	BACS, Faster Payments, CHAPS, International Payments
Customer Support Channels	Branches, telephone, online, and mobile app support	In-app chat support, email support
International Banking Services	Specialised international banking solutions available	International banking services offered
Digital Features	Mobile check deposit, spending categorization, alerts	Real-time transaction notifications, spending insights
Currency Exchange and International Transfers	Foreign currency services available	International transfers and currency exchange services
Third-Party Integrations	Limited integrations with third-party services	Seamless integrations with third-party services

Please note that the information in the table is subject to change and it is advisable to visit the respective bank’s official websites for the most up-to-date and accurate information on their offerings.

Statistics

1. Lloyds:

• Lloyds is one of the largest retail and commercial banks in the UK, serving over 26 million customers.
• Lloyds has approximately 1,000 branches across the UK, providing businesses with convenient access to in-person support and services.
• In 2020, Lloyds reported a total income of £14.4 billion from its commercial banking division, showcasing its significant presence in the business banking sector.

2. Starling:

• As of 2021, Starling Bank has grown to over 2 million personal and business account customers since its launch in 2014.
• Starling has processed billions of pounds in payments each month, indicating its ability to handle high transaction volumes for businesses.
• In 2021, Starling Bank secured a £50 million grant from the Capability and Innovation Fund to further enhance its services and support small businesses.

Pros of Lloyds

• Established presence: Lloyds has a long-standing reputation in the UK banking industry. It has a vast network of branches, making it convenient for businesses to access in-person services and support.
• Wide range of services: Lloyds offers a comprehensive suite of business banking products, including current accounts, loans, credit cards, merchant services, and international banking solutions. They cater to the diverse needs of businesses of all sizes.
• Relationship managers: Lloyds provides dedicated relationship managers who can offer personalised advice and support to businesses. This can be valuable, especially for those requiring a more hands-on approach to banking.

Cons of Lloyds

• Complex fee structure: Lloyds’ fee structure can be intricate, with various charges for different services. Businesses should carefully review the terms and conditions and be aware of potential fees for transactions, overdrafts, and other account activities.
• Limited digital-first approach: While Lloyds has made progress in improving its digital banking services, it may not match the seamless user experience and innovative features offered by newer digital banks like Starling.

Pros of Starling

• Seamless digital experience: Starling Bank is renowned for its user-friendly mobile app and intuitive digital banking platform. It offers a range of innovative features, such as real-time transaction notifications, spending insights, and easy payment integration with accounting software.
• Cost-effective: Starling’s business account has transparent pricing with no monthly fees. This can be highly beneficial for small and medium-sized businesses looking to minimise banking costs.
• Quick and easy account setup: Opening a Starling business account can be done entirely online, making the process quick and convenient. It eliminates the need for in-person visits or extensive paperwork.
• Integrations with third-party services: Starling Bank provides seamless integrations with various third-party services, including accounting software, expense management tools, and e-commerce platforms. This allows businesses to streamline their financial management processes and enhance efficiency.

Cons of Starling

• Limited physical presence: As a digital-only bank, Starling does not have physical branch locations. This can be a disadvantage for businesses that prefer face-to-face interactions or need immediate in-person support.
• Limited lending options: While Starling offers overdraft facilities, its lending options may be more limited compared to traditional banks like Lloyds. Businesses requiring significant loans or more complex financing arrangements may find other banks more suitable.
• Customer support channels: Starling primarily offers customer support through digital channels, such as in-app chat and email. While these channels are generally responsive, businesses that prefer direct phone support or in-person assistance may find this less convenient.
• International transactions: While Starling does offer international banking services, businesses with extensive international operations or complex cross-border transactions might find specialised international banking solutions provided by traditional banks more comprehensive.

Lloyds vs Starling – Key differences

1. Digital experience: Starling Bank is renowned for its user-friendly mobile app and innovative features, providing businesses with a seamless digital banking experience. Lloyds, although improving, may not offer the same level of convenience and cutting-edge technology.
2. Overdrafts and loans: Lloyds has a well-established lending division, making it an attractive choice for businesses seeking loans and overdraft facilities. Starling, on the other hand, may have more limited lending options, which could be a deciding factor for some businesses.
3. Branch access: Lloyds has a significant advantage with its extensive branch network, allowing businesses to access face-to-face support. Starling, being a digital-only bank, does not have physical branches. This might be a drawback for businesses that prefer in-person assistance.

Lloyds vs Starling – Costs and pricing

Both Lloyds and Starling offer various business account options with different pricing structures.

Lloyds’ fees can be complex and vary depending on the type of account and transaction volume. It is advisable for businesses to carefully review the fees associated with their specific needs.

In contrast, Starling offers transparent and straightforward pricing with no monthly fees for their business account, making it an attractive choice for cost-conscious businesses.

Lloyds vs Starling – Other considerations

1. Integration and accounting software: Businesses that rely on seamless integration with accounting software should consider the compatibility and ease of integration provided by each bank. Both Lloyds and Starling offer integrations with popular accounting platforms, but it’s important to verify compatibility with your preferred software.
2. Customer support: Lloyds’ physical branches provide businesses with the option to seek in-person assistance from dedicated relationship managers. Starling, on the other hand, offers support primarily through digital channels, which might suit businesses comfortable with remote support.

Lloyds vs Starling – Verdict

In conclusion, choosing between Lloyds and Starling for business banking depends on your specific needs and preferences.

Lloyds offers an established presence and a wide range of services, while Starling excels in providing a seamless digital experience.

Consider factors such as pricing, the need for branch access, digital capabilities, lending options, and integration with accounting software.

If your business values the convenience of physical branches and personalised support, Lloyds might be the preferred choice.

However, if you prioritise a user-friendly digital experience, innovative features, and cost-effectiveness, Starling could be the better option.

Lloyds vs Starling – FAQ

Please note that the answers provided are based on general information and it is advisable to visit the respective bank’s official websites or contact their customer support for specific and up-to-date details regarding their business banking services.