London (Parliament Politics Magzine) – UK small businesses at threat of closure due to increasing costs and hidden bank costs, study reveals.
A shocking seven out of 10 small and medium companies are living in fear that escalating expenses could force them to shut down, yet they’re unwilling to pass these on to consumers.
A survey of 500 small UK businesses displayed a worrying 88% claim they are doing ‘all they can’ to lower overhead costs, but a substantial 69% still fret that their business may be compelled to close.
How are hidden bank fees impacting small companies?
As many as 49% point this to the relentless growth in material costs, while 19% are responsible for hidden fees charged by banks. Small British businesses assess they are shelling out more than £3,700 every year in hidden charges or fees levied by monetary institutions for international transactions, which could correlate to three months’ worth of business rent in major UK cities.
There’s a possibility that figure could grow, as 15% of businesses have ambitions to expand internationally. In an action to shield customers from further price hikes, 35% are endeavouring to negotiate better rates with suppliers and 31% are cutting back on energy use.
Despite these measures, a disheartening 56% have had to enforce redundancies, with a massive 84% of those saying it was their ‘last resort’.
What legislative changes could help small businesses?
The research was authorised by Wise, which is spearheading its End the Opt-Out campaign to alter legislation so small businesses have transparency on fees they are assessed for international transactions. According to the firm’s research, this amounts to a whopping £2.8bn per year.
Arun Tharmarajah, head of European payments at the international money app for consumers and businesses, has expressed the tough decisions business landlords are having to make in these challenging moments.
“Small businesses don’t want to pass rising and unexpected costs onto their customers, given the pressure people’s pockets already face this winter. This leaves many businesses in a tricky position,”
he stated.
He also stressed that those who transfer money overseas as characteristic of their business operations often fall victim to financial providers who set grossly unfair fees disguised in the exchange rate.
