Bibby CEO comments on banks hidden fees for SMEs
Commenting on MarketInvoice’s research which shows that UK banks are charging businesses £425m a year in hidden extra fees for short-term financing.
David Postings, CEO of Bibby Financial Services, said: “There is no doubt that the banks could do more to improve the transparency of their fees and treat small businesses fairly. But it is wrong to say that UK SMEs are faced with a simple dichotomy between the big banks on the one hand and emerging peer-to-peer lenders on the other. UK SMEs have a number of financing options available to them, including thriving independent funders. Bibby Financial Services acted as the lifeline for small businesses during the recession and we are now helping them return to growth.
“The political parties’ manifestos reflect this perceived dichotomy, indicating a worrying ignorance of how SMEs seek financing. The reality is very different. There is a long-standing tradition of independent support for small businesses, which the UK should be proud of and nurture.
“The political parties appear to believe that more quangos will solve all of SMEs’ problems. But will a Small Business Administration, a Small Business Conciliation Service and a British Investment Bank foster growth in the crucial SME sector? The next government should focus on making all the options available to SMEs self-evident, rather than creating more public bodies.
“Peer-to-peer lenders, praised widely by media and politicians, are not the salvation of UK SMEs. Nor do they represent a panacea to the market as a whole. We should not mistake novelty for improvement. From our customer feedback, many small businesses are nervous about using these untested platforms. They prefer more personal and local service which can respond to their specific needs, which is why our business is expanding our locations and employee numbers to be nearer to our customers.
“The next government must prioritise educating UK SMEs about all the financing options available to them, including independent funders. Only then will we improve the UK’s productivity and innovation, areas where we are sadly underperforming against our global counterparts.”