Banks have increased the interest rates on their business account overdraft that is threatening the survival of a vast number of small businesses in the UK according to the Federation of Small Businesses (FSB).
In the current market small businesses are increasingly relying on overdraft facilities to keep themselves afloat as their customers, both business such as Boots and consumers, take longer to pay for goods and services.
In the example of Boots they have gone from paying suppliers within 30 days to making suppliers wait up to 100 days for payment.
This type of action from a big retailer is not uncommon as everyone looks to conserve their cashflow.
However it is the move by the banks, especially Barclays, to increase the interest charges by as much as 33 per cent.
The FSB is concerned that many small businesses may be driven under as the combination of these two factors, late payment from customers and increased overdraft charges, start to take affect and wipe-out cashflow.
With tightening credit it may be tempting for businesses to cut expenditure like business insurance, but in this is when having insurance makes the most sense as even a small loss could lead to the business being wound up.
At lowerpremium.co.uk you can compare business insurance policies for liability, shops and offices finding the right insurance cover for your business at the best possible price.
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