Changing banks boosts SME savings

18 June 2003
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19 June 2003 | David Arminas

Cash-strapped SMEs are looking to change their banks in an effort to cut financial services costs, according to a new report.

A quarter of 300 SMEs surveyed by the Alliance and Leicester Bank said they would switch banks or review financial services in an effort to cut costs.

Although changing banks is still a low priority, a spokesman for Alliance and Leicester said it is increasing.

"There is a perception that it is difficult to change banks, but it is easier than believed and is an area where SMEs can make substantial savings," he said.

The West Midlands was the shrewdest region when it came to changing banks, with 40 per cent having considered or done it. Scotland was second at 35 per cent, with the Welsh most unlikely, at 4 per cent.

The most popular way for SMEs to save money is to change suppliers, which was cited by 42 per cent in the survey.

The next most favoured cost-cutting measures, cited by 40 per cent of respondents, are greater use of technology and cleaning the office themselves.

· The European Commission has raised the turnover thresholds for defining SMEs. A medium-sized company, with between 50 and 249 employees, will have a turnover of up to £35 million (50 million euros).

A small company, with between 10 and 49 employees, will have a turnover of between £1.5 million and £7 million

(2-10 million euros). A micro company with fewer than 10 employees will have up to £1.5 million turnover (2 million euros).

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