Shropshire firms urged to think about 'missing interest'
Figures show that Shropshire SMEs could be losing out on £45,590,895 a year in ‘missing interest’ that could otherwise be pumped into the region’s economy.
That is the verdict of Allica Bank’s latest independent tracker, which monitors interest rates offered to SMEs.
It says that, while some banks are currently offering an average rate of just 1.28% to small businesses on their savings - which amounts to £961.50 earned off the average £75,000 in savings - others are offering rates of up to 4.11% on the same cash, earning businesses with the same amount in the bank £3,082.50 a year.
That's £2,121.00 that the average business with £75,000 loses out on every year in savings.
The extra cash could have a significant impact on the region, as well as for individual businesses.
For those more established businesses with £1 million in the bank, this missing interest totals £28,280 annually, meaning the figure could be even higher.
Steve Sisson, Allica Bank's Relationship Manager for the Midlands, said: “There are nearly 21,500 SMEs in Shropshire.
"These SMEs are the life and soul of the region, providing diverse employment opportunities, generating revenue that feeds back into the local economy, and the services and community spaces that make Shropshire special.
"However, some banks are offering them a pitiful return on their hard-earned money.
“If Shropshire businesses moved their money and got a better return, it could result in a £45 million boost to the regional economy that could be put towards investment, employment and a better deal for employees.
"This is especially critical for the established businesses that Allica serves – those with 5-250 employees – who will typically have much more cash on the balance sheet.
“For example, a business with £1 million in excess cash could earn an extra £28,000 simply by switching where they keep their savings.
"That amount of money could be used to hire a new employee or invest in new technology or machinery to improve workflows or accelerate their growth plans.
“We would recommend that all SMEs should shop around to look for banks that offer them the return on their savings that they deserve."
