smallbusiness.co.uk: Helping your business think big

A thaw on bank lending to businesses is being nullified by a raft of new stealth charges, claims Clifton Asset Management (CAM).

The financial services specialist suggests that lenders are trying to persuade small and medium-sized companies to convert their overdrafts into loans that have higher interest charges and more stringent repayment terms.

CAM’s managing director Neil Greenaway says: ‘[Evidence] of recent weeks seems to show that the banks’ long-held claim – that they are continuing to lend to SMEs – may finally be starting to ring true.

‘But unfortunately the caveat to this is that they are increasingly adding on hefty charges for things such as arrangement fees, facilitation fees, audit fees and review fees, all of which come in addition to the interest on the loan.’

Greenaway argues that if a loan is agreed with a business, it is now commonplace ‘for the bank to say they need to review it every three or six months, rather than every year as they did previously – and they are charging a review fee each time’.

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