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11th May 2011
Unfair banking practices affect SMEs and contractors
Unfair banking practices are affecting contractors and other small businesses more than larger companies, according to Lib Dem Treasury spokesman Lord Oakeshott.
He has led an enquiry into the interest rates paid by larger firms in comparison to the rates charged to smaller firms or to contractors working under umbrella companies or their own limited companies.
The figures collected show that a large firm borrowing £20 million from a bank would pay interest of around 1.78 per cent. However, SMEs and small limited companies pay around 3.69 per cent interest if they borrow a smaller amount.
The news of the discrepancy proves that the government has a long way to go in its goal to encourage growth in the small business industry to boost jobs and economic growth. Lord Oakeshott is now urging the government to apply more pressure on banks to help small businesses borrow under the same terms as large businesses.
As the policies stand, the system is “making a mockery” of the government’s plans to encourage small business growth to lead the way in the country’s economic recovery, according to Lord Oakeshott.
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