Small Business Banking - Companies missing out on £502m

Small businesses are missing out on a whopping £502 million each year by sticking with banks that don’t give them the best deal on their current account, according to new research released this week by Alliance & Leicester Commercial Bank.

The research found that it is the crippling fees for handling cash that are costing businesses with a turnover of less than £1 million a year the most. Collectively the country’s small businesses could claw back nearly £300 million on cash transactions alone if they chose to shop around for lower charges.

The research found that the average business spends about £425 on cash transactions each year when they could be paying around £80. In addition, businesses could save more than £202 million on non-cash transactions such as direct debits and standing orders when they could be receiving these services for free.

Companies in business services, retail and construction are collectively missing out on £245 million by not shopping around. And businesses in the South East are the hardest hit, missing out on nearly £89 million, while London businesses are wasting nearly £70 million each year.

Steve Jennings, Director of Business Banking at Alliance & Leicester Commercial Bank, said: “The country’s small businesses are short-changing themselves. With 80% of small businesses signed up to the traditional banks, the likelihood is that they are missing out on the best banking deals available. We would encourage every business to shop around to check if they can get the same service for a better price elsewhere.”

Alliance & Leicester Commercial Bank’s award winning, Free Business Current Account provides free and unlimited standing orders, direct debits, cheques and ATM withdrawals, as well as free and unlimited cheque payments in and out of the account.

Cash deposits are free up to £1,000 per month, followed by a market-leading rate of 23p per £100 – nearly 50% cheaper than the nearest Big Bank rival.