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Banking services for SMEs 'improve slightly'

Published On 4 May 2007 at 11:48:40

Small and medium-sized enterprises (SMEs) could take advantage of better deals on business current accounts and save themselves significant sums of money, according to a industry expert.

Lee Tillcock, the business editor at the website moneyfacts, cited a recent report from Standard Life Bank which found that UK SMEs could be missing out on over £1 billion of interest by not choosing competitive bank accounts.

However, Mr Tillcock pointed out that the situation has improved for SMEs in recent months.

"The last few months have seen increased activity in the sector, with three of the so-called 'challenger banks', Abbey, Alliance & Leicester Commercial Bank and Bank of Scotland, all recently announcing new offers," he explained.

Alliance & Leicester now offer all businesses a free current account with an interest rate of six per cent AER on balances up to £1,000. Businesses switching to Abbey will receive the same rate of interest once they have been with the bank for a year.

Equally, the Bank of Scotland promised to pay businesses who switch to one of its accounts £500 if it cannot beat the SME's existing banking deal.

"It still remains the case that any small business looking for a new bank needs to weigh the price on offer against the level of service, but if the last few weeks are the beginning of a trend, then SMEs surely stand to benefit in the long term," Mr Tillcock added.

 

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