The Times reports that ithe Financial Conduct Authority will be warning banks about exploiting small businesses. This relates specifically to providing low savings rates. A recent study says that small businesses are losing out on over £7.5bn each year. This is due to deposits sitting in accounts with no interest and receiving worse rates than larger companies. The regulator believes that SME’s should be treated like individual customers when it comes to providing fair rates on savings. The Treasury select committee is also expected to investigate inequality in the business savings market. Martin McTague, national chairman of the FSB, states that small businesses face significant barriers, with interest rates on small business loans commonly exceeding 10%. The regulator is due to provide an update on banks’ performance in the coming weeks. UK Finance, the banking trade body, has advised smaller companies to “shop around” in the competitive deposits market.
Not before time! Another example of the Banks not going out of their way to encourage SME’s.