More than half of small and medium-sized enterprises (SMEs) believe bank charges are too high, yet few are actively looking for alternative finance suppliers, new research has found.
The YouGov SixthSense SME Banking Report revealed that 58% of small businesses said charges levied by banks are too high, while 27% believe they are unjustified and 24% indicated that they are complex.
The survey, which polled 937 senior managers from companies of between two and 249 employees, revealed that 74% see charges as an easy way for banks to make profits.
Half of SMEs think charges have increased over the past three years, while 49% feel charges are now levied on services which were previously free.
Simon Mottram, director of financial services consulting at market research agency YouGov, said: “The level of charges and fees imposed on SMEs by banks for the operation of the accounts has long been a source of dispute between the two parties. Yet smaller businesses appear to be suffering in silence over this issue.”
Despite one third of small companies having complained to their banks in the last two years, the report found that 73% “rarely” or “never” search for another provider.
According to YouGov, 15% of SMEs have tried to switch provider in the past two years, with only 8% succeeding in doing so.
SMEs also voiced their beliefs that banks are offering finance on more restrictive terms, with 35% of those polled saying that negotiating maximum loan amounts has become more difficult in the last three years against 4% that said it had become easier, making a “net harder” result of 31%.
Mottram added: “The message from our report is clear – banks need to build closer relationships with SMEs and improve communications.
“Banks must make life easier for SMEs as these businesses are vital for creating jobs and generating economic growth.”
Published 29 August 2012