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Banks overcharging for gov scheme

Small businesses believe that banks are charging too much in administration charges and interest rates under the government's Enterprise Finance Guarantee scheme, according to research from Durham University.

The research reveals that the average administration fee charged by Enterprise Finance Guarantee lenders is £2,430, with interest rates set at just under 6%. Only 26% of small businesses surveyed are satisfied with the amount charged in administrative fees.

"Interest rates are at artificially high levels and are deterring businesses from borrowing. Banks need to start playing ball by making finance more affordable and assessing businesses credit worthiness on a case-by-case basis," said Phil McCabe, spokesperson for the Forum of Private Business.

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Post Date: January 5th, 2010