Lack of Interest Hits Small Firms; FINANCIAL MAIL,BUSINESS & MANAGEMENT
Byline: RUTH SUNDERLAND
SMALL firms are losing out on [pounds sterling]3.3 billion a year because of miserly interest rates paid by High Street banks.
New research based on 7,500 small companies shows that a typical firm loses income of nearly [pounds sterling]1,000 by failing to put spare capital into top-paying bank accounts.
The survey reveals that firms have an average balance of [pounds sterling]33,000 in capital. But most High Street banks and building societies pay only 4.5% gross on interest, working out at about [pounds sterling]1,500 a year before tax.
By moving to a top-paying business bank account, firms could earn [pounds sterling]2,400 on the same amount.
The findings add weight to Financial Mail's Better Business Banking Campaign, which wants the big four - Barclays, Lloyds TSB, NatWest and Midland - to give a better deal to firms that stay in the black.
The big four have high charges for firms that never overdraw, and refuse to pay interest on credit balances in current accounts.
Banks face a review led by Don Cruikshank, the former telecoms regulator, aimed at improving the support they give to small businesses.
The research into business savings rates was carried out by Standard Life bank, which offers a top-paying telephone account with a rate of 7. …