British Bankers Association

Small Businesses Lose Over £1bn Annually by Keeping Cash in Business Current Accounts

Small Businesses Lose Over £1bn Annually by Keeping Cash in Business Current Accounts

Small businesses lost over £1bn last year by keeping their cash in a low-interest business current account, according to a report by Flagstone Investment Management. The research found that interest rates are now lower than they were 12 months ago, with four out of the five major banks now paying 0% interest – and Santander offering just 0.25%. According to recent figures from the British Bankers’ Association, small to medium sized enterprises held £95.3bn in business current accounts at the end of 2015, an increase of £8.1bn since the end of 2014. 96% of firms currently use the big five banks but could be offered interest rates of up to 1.8% if they were to switch to alternative accounts. Andrew Thatcher, founder and managing partner of Flagstone Investment Management said: “Small b... »

Statement of Principles — Banks and Businesses Working Together

Banks commit to support small businesses

The British Bankers’ Association (BBA) has revised its guidelines on bank lending to help small firms access the funds they need to survive the recession. The rewritten Statement of Principles sets out guidelines which must be implemented by all UK banks that comply with the Business Banking Code. The guidelines for the banks include contacting firms they believe are in trouble, offering to discuss all concerns in person, using their business assets to secure debt before considering personal assets, and helping customers to revise their business plans and forecasts. Stephen Alambritis, Federation of Small Businesses (FSB) head of parliamentary affairs said: “Small firms should see the benefits of these guidelines in the new year. However, the evidence that we have had from busi... »

Sole Traders Opting Out of Business Banking

Sole traders and home-based businesses are shunning business banking in favour of personal accounts, writes Farah Jifri. According to research by Moneysupermarket.com, more than a million owner-managers are choosing to stick with their retail account rather than take advantage of specialist services that may accompany business banking, the survey suggests. The British Bankers’ Association (BBA) believes this is largely because owner-managers do not get around to changing their accounts as their business that started as a hobby evolves. Moneysupermarket.com, however, claimed the main reason was the wide gap between interest rates available on personal and business accounts. A high street bank might offer up to eight per cent interest on balances up to £2,500 in their personal accounts... »