News: Loan Costs on the Rise for Small Businesses

Photo by PT money

Schemes such as Funding for Lending, designed to reduce the cost of business borrowing, are failing to cut costs for smaller businesses, according to a new report. Small businesses are discovering that loan costs are actually on the up thanks to rising interest rates.

In a new report from Syscap, it was revealed that interest rates on new bank loans under £1 million averaged around 3.85% in quarter three, up from 3.76% in quarter two.

However, large businesses borrowing more than £20 million benefited from a fall in interest rates over the same period.

Philip White, chief executive of Syscap, said: “While Funding for Lending seems to be having a positive effect for some, small businesses are still struggling to get loans at commercially viable rates.”

For those planning on starting a business, funding is becoming an increasingly sore subject. Did you secure a bank loan or did you come up with a creative fund your business? Leave us a comment to let us know.

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Kasey writes about the latest small business and website news for bOnline. Find Kasey on Google+, or follow bOnline on Facebook, Twitter, LinkedIn and Google+

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