‘Small firms should shop around with banks’, says FPB

31/08/07 16:24

Small businesses need to think ahead when they choose which bank they should go with, according to a report from the Forum for Private Business.

Following last week’s announcement by the Competition Commission (CC) to lift price controls on four major business banks – which many business groups are in opposition to – the FPB urged small businesses to look around for the best deals.

The report is based on a survey commissioned by FPB last autumn of 3,700 firms, which looked at attitudes towards seven major banks, including the four that have recently been covered by price control regulations: HSBC, Barclays, Lloyds TSB and the Royal Bank of Scotland.

Overall, the survey found ‘clear evidence’ of a general improvement in banks’ performances in relation to small businesses.

Results found that with a total of almost 70%, Barclays had the highest number of happy customers not considering change, while Lloyds TSB had the lowest with around 55%.

The survey also found that the taking of personal collateral for loans still represented a significant difficulty for businesses.

Matt Hardman, the FPB’s campaigns manager said: “It’s inconsistent for business groups that campaign against regulation and believe in competition to support price controls.”

He added that the FPB’s aim was to bolster healthy competition and encourage businesses to negotiate with their banks for better deals.

“Shop around for the best service,” he advised, “and change banks if you are not satisfied.”