Small firms hit by bank fees
Banks target small firms with new fee-free offers
Small businesses are paying more than £65 million in bank charges each year, according to new figures.
New research from The Co-operative Bank shows that fees for depositing cash over the counter, limits on cash and cheque deposits, overdrafts and other transaction charges mean small firms could be paying more than £65 million unnecessarily to their bank.
Some 40% of bosses surveyed said that uncertainty and confusion surrounding bank charges is one of the biggest problems they encounter.
“Small business owners have enough day-to-day problems to deal with without having to worry about costly bank account charges,” said Sheila Macdonald, chief operating officer at The Co-operative Bank.
The survey of members of the Federation of Small Businesses (FSB) coincides with The Co-operative Bank’s launch of its new FSB Business Banking service.
The service aims to provide small business current-account holders with free banking, from fee-free overdraft to a lifetime free Visa card and an annual loyalty bonus of £25.
Customers will have a say in where their money is invested, and the Bank will turn away business from companies or organisations considered unethical.
Alliance & Leicester, meanwhile, offers a similar current account for small businesses with a turnover of under £1million a year. The account provides free and unlimited standard non-cash transactions and allows customers to bank via the internet, fax, phone or at local Post Office branches.
Lloyds TSB and NatWest presently offer current accounts for small and start-up businesses, providing free banking on all transactions for the first 18 months, while Bank of Scotland and Barclays offers the same service for 12 months.