FPB reveals bank charge increase

Banks are imposing a range of charges, increasing interest rates and demanding personal guarantees for lending, according to research by the Forum of Private Business (FPB).

The study found that 63 per cent of businesses believed the cost of finance to be a major issue, while almost one in five said that it had become a ‘serious concern’.

In one particular case, Hamilton Beverstock, a Berkshire-based tool supplier and FPB member, saw bank costs increase by 80 per cent compared to its rate a year earlier.

Stuart Hamilton, Hamilton Beverstock’s technical director, said: ‘We ran out of cash at the beginning of the year, like most other businesses. Rather than play the credit game, we approached the bank for extra funding and were told the only way was under the Enterprise Finance Guarantee (EFG).

‘We already had a £50,000 overdraft but they wanted to lump it together with a loan and charge us two per cent from nowhere, basically for a facility worth the same amount as we already had.’