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Small businesses are still reluctant to shop around for better banking

A recent YouGov survey has revealed that a majority of small businesses are reluctant to change their banks despite concerns over charges being unfair, too high or simply a way to increase bank profits rather than as a charge for services rendered. A third of companies polled made complaints to their banks without reaching a satisfactory outcome, and half believe charges over the last three years have increased for services that were once free. Furthermore, quarterly figures from the SME Finance Monitor reveal the drought in lending has become worse this year with only 43 per cent of SMEs obtaining external finance in comparison with 51 per cent the previous quarter, according to researcher BDRC Continental.

Contributing factors to the reluctance of SMEs to change banks include inertia and concern over the difficulties, risks and costs involved in switching. However, research has shown that improved interest rates and simplicity in setting up accounts can make the difference in convincing small business to change. Certain building societies are also beginning to take advantage of the situation by offering new accounts to SMEs with competitive interest rates and attractive terms.

The capabilities of a contractor cheap accountancy service to handle payroll or other business related financial requirements for the small business could give time for the business owner to focus effort on what might now be available. Such a service could also offer valuable insights to help in the final selection of a new and more competitive banking service.

Posted by Peter
September 9, 2012
Small Business

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