West Midlands SMEs lose out on nearly £500m in ‘missing interest’
New research from Allica Bank reveals that small and medium-sized businesses across the West Midlands are losing out on nearly £500 million annually as a result of not shopping around for better interest rates on their business savings.
The analysis reveals that the ‘big six’ high street banks offer an average interest rate of 1.45 per cent on small business savings, down from 1.59 per cent earlier in the year. Beyond the big six however, rates of up to 4.33 per cent available from challenger banks, a figure nearly three times higher than the big six.
For SMEs with an average £75,000 in savings, the discrepancy between big six interest rates and what’s available elsewhere is equivalent to £2,157 per year. With nearly 217,000 SMEs across the West Midlands, this equates to a whopping loss of £467,939,580 for the regional economy. For established SMEs with larger deposits of savings, the annual figure lost could be much higher.
Steve Sisson, West Midlands relationship manager at Allica Bank, said: “The West Midlands SME economy is the West Midlands real economy, accounting for 217,000 businesses. These businesses are the life and soul of communities across the region and the difference between boarded up shops and vibrant high-streets.
“Despite this, SMEs aren’t getting the returns they deserve from high-street banks with interest rates that are consistently lower than are offered to bigger businesses. This lost income could represent a significant boost to the West Midlands economy and be put toward investment, employment and a better deal for employees.
“The high-street banks are taking SME customers for granted, and those customers should shop around and get the return on their savings that they deserve.”
