Britain's small and medium-sized enterprises (SMEs) are collectively losing vast sums of money each year, with their hard-earned cash generating pitiful returns in traditional business bank accounts. As operational costs continue to rise, many business owners feel their banking partners are letting them down, paying far less interest on balances than they offer to larger corporate clients.
The High Cost of Loyalty to High Street Banks
According to analysis from challenger bank Allica, a significant gap exists between the interest rates offered to SMEs and those available to bigger companies. Allica Bank reports that SMEs can receive up to 2.9% less interest on their surplus funds. This disparity has a severe real-world impact on a company's finances.
For a typical business holding an average balance of £75,000, this shortfall can mean over £2,100 in lost potential revenue every single year. The figures become even more stark for larger SMEs. A company with £1 million in its account could be missing out on a staggering £28,000 annually, simply because their bank is not rewarding their balance appropriately.
A Modern Alternative for Established Businesses
This financial drain is driving a growing number of business owners to re-evaluate their banking arrangements. Allica Bank's Business Rewards Account is designed specifically to address this issue for established firms, aiming to give something back for every pound managed and spent.
The account's central feature is an instant-access Savings Pot, which pays up to 4.08% AER (Annual Equivalent Rate). This allows dormant capital to finally work for the business, rather than sitting idle. Furthermore, the account provides up to 1.5% cashback on business card expenditure, turning routine bill payments and operational spending into a source of real monetary return.
Beyond Rates: Service and Integration
Business owners switching are also citing a renewed sense of service as a key factor. Allica provides each customer with direct access to a dedicated relationship manager, moving away from the impersonal, call-centre based service often experienced at larger institutions. The account opening process is noted for its speed, typically completed in under two weeks, with support to minimise administrative hassle for time-poor directors.
The accompanying technology is built for the practicalities of running a growing SME. Features include the ability to issue employee cards with custom spending controls, create separate pots for purposes like payroll, and seamless integration with major accounting software platforms like Xero, Sage, and QuickBooks. This connectivity aids real-time cash flow management and reduces the administrative burden at month-end.
With variable rates and cashback offers subject to eligibility criteria and terms and conditions, the message to business owners is clear: in an era of rising costs, allowing a bank to underutilise your company's money is an expense few can afford. Reviewing your business current account could be a crucial step in ensuring your finances are working as hard as you are.
