Switching banks could provide businesses with a bright future

Switching banks could give SMEs the boost they need for a successful 2008, according to research from Alliance & Leicester Commercial Bank. With the saving possible enabling many to invest in their businesses in a variety of ways.

Steve Jennings, Director of Business Banking at Alliance & Leicester Commercial Bank, said: “UK SMEs are missing out on over £500 million every year, simply by not shopping around for the best deal – our latest research shows that savings made on bank charges and credit interest could make a real difference to a business. It’s vital that businesses review their banking regularly to ensure they are getting the value they deserve.”

Businesses with a turnover of up to £1 million have the potential to save thousands of pounds annually by shopping around for the best value account for their individual business needs.

These savings could make a considerable difference to SMEs. Over a third (35%) of SMEs surveyed said that they would plan for the future by putting the money into a business savings account, whilst one in four (25%) would use the extra cash to pay off debts. Many would use the sum to invest in business development, with more than one in ten (12%) choosing new IT systems, 9% opting to spend the saving on additional advertising or marketing, 4% investing in premises and a further 4% ploughing the cash into research and development.

The number of businesses switching banks is increasing, the research found that one in fourteen businesses (7%) have switched business banking providers in the last year alone.

Almost a quarter (23%) of those that haven’t switched mistakenly believe all banks are the same, so “there’s no point in changing” and almost one in five (19%) feel that they simply don’t have the time. However, switching banks is less arduous than people think and to assist with the process Alliance & Leicester Commercial Bank has put together a simple step by step guide which is available via www.alliance-leicestercommercialbank.co.uk. With thousands of pounds of savings up for grabs, shopping around could be time well spent.

Steve Jennings adds: “Whilst a growing number of small businesses are switching away from the traditional business banks and discovering the better value on offer from challenger banks, such as Alliance & Leicester Commercial Bank, many businesses are still missing out.”

Alliance & Leicester Commercial Bank has recently put its money where its mouth is with the launch of its new £2,000 Switcher Price Guarantee. The guarantee promotes the award-winning Free Business Current Account and offers businesses who bank with HSBC, NatWest, Barclays, Lloyds TSB or Bank of Scotland £2,000 if the bank fails to make them a saving after
12 months.

As part of the new Switcher Price Guarantee, businesses that also move their overdrafts or loans to Alliance & Leicester Commercial Bank will not pay any arrangement fees. The Bank also guarantees either to match or better their current loan or overdraft interest rate and pay up to £100 of any loan early settlement fee.

Steve Jennings adds: “The Competition Commission’s recent decision to lift price controls on a number of UK banks was recognition of the strong alternatives available to small businesses. And we were pleased to see that, according to research carried out by the Office of Fair Trading, Alliance & Leicester Commercial Bank is now the number one choice for businesses who are considering switching banking providers.”