Sweeping and Pooling
Standard cash-management tools that support a customer’s liquidity and working capital requirements.
If you have two or more accounts within your business or group of businesses, Cash Pooling can help you minimise your borrowings or optimise interest payments on surplus funds. Bringing your account balances together can help you improve liquidity within your organisation and help you get to grips with your overall cash position.
There are two main ways in which we can help. Firstly, our Sweeping service enables you to concentrate all your cash into one account, perhaps an interest-earning deposit account. You will then earn interest on that overall balance or pay interest on any residual borrowing outstanding on your current account(s).
Secondly, Notional Pooling delivers a similar end result to sweeping without the physical movement of funds enabling your business accounts to remain separate and so avoid inter-company borrowing. Interest is calculated on the net overall balance across your group of accounts.
As well as optimising your interest position, sweeping and notional pooling supports working capital and can help improve liquidity. An added benefit for Notional Pooling is that it makes account reconciliation simpler.
These services are currently available to sole traders, partnerships and for companies incorporated in England, Scotland, Northern Ireland and Wales.
Bear in mind, there can be tax and legal/compliance implications for these arrangements, so we recommend you talk to your accountant and/or solicitor. However, Sweeping and Pooling can be an effective liquidity management tool that supports your business’ cashflow and working capital requirements.
Sweeping and Pooling deliver improvements to a business’ liquidity
You can use your group or company funds to keep borrowing costs as low as possible
You can optimise your interest position on a combined surplus
These services support your working capital needs
Notional Pooling aids account reconciliation, as there is no physical movement of funds.
N.B. To be eligible for Notional Pooling there is a minimum borrowing threshold of £25,001.
- Companies, sole traders and partnerships of all sizes looking to optimize interest payments on combined surpluses, minimise costs on borrowings or improve overall liquidity
- Note, these arrangements will likely require independent legal or tax input from your own advisers
- For group arrangements involving two or more legal entities, inter-company guarantees will be required.