Hidden bank fees could force small businesses to close | Personal Finance | Finances

Seven out of ten small and medium-sized enterprises fear that rising costs will force them to close.

A survey of 500 small UK businesses found that 88% say they do “everything they can” to reduce overhead costs. However, 69% are still concerned that their business may be forced to close.

As many as 49% blame the constant increase in material costs, and 19% justify hidden fees charged by banks.

Small British businesses estimate they pay more than £3,700 each year in hidden fees or fees charged by financial institutions for international transactions, which could equate to three months’ business rent in major UK cities.

There is a possibility that this number could increase as 15% of companies want to expand internationally. To protect customers from further price increases, 35% are trying to negotiate better rates with suppliers and 31% are reducing energy consumption.

Despite this, 56% of employees had to make redundancies, and 84% said it was a “last resort”.

The research was commissioned by Wise, which supports the End the Opt Out campaign to change regulations to give small businesses transparency about the fees they charge for international transactions. According to the company’s research, this amounts to £2.8 billion per year.

Arun Tharmarajah, director of European payments at the international money app for consumers and businesses: “In these difficult times, business owners must make difficult decisions.

“Small businesses don’t want to pass on rising and unexpected costs to their customers, given the pressure people are facing in their pockets this winter. This puts many companies in a difficult situation.

“People who send money abroad as part of their business often fall victim to financial services providers who defraud them by charging grossly unfair fees hidden in the exchange rate.”

Other issues small businesses face include increased shipping costs (39%) and employee pay increases (35%). Unfortunately, 89% believe that if costs had not increased, their company would have made much more profit over the last 12 months.

More than a third of 35% are also concerned about the impact of high energy prices over the festive period. According to Onepoll data, a quarter of businesses believe this Christmas will be the most important event their company has ever faced.

Arun Tharmarajah added: “As small businesses deal with rising costs, it is critical to remain flexible and creative in finding solutions that will not negatively impact their customers.

“Things can change quickly, whether it’s streamlining operations, negotiating better terms with suppliers, or adopting new technologies that help reduce costs.

“Ending opt-outs and improving laws prohibiting hidden fees is a simple and cost-free way to help the nation’s small businesses.”

Davide Troise, founder of Troise & Sons hairdressers in Hackney, London, believes his successful business has bucked this trend and now wants to expand to Europe.

However, as he increases his offer to Barcelona, ​​dealing with British banks is proving problematic as he tries to find the information he needs to make the most informed decision about whether to continue his international expansion.

He said: “Many small businesses in the UK may want to expand internationally to take advantage of a larger customer base like ours, but there can be many barriers to this. After successfully operating in London, we are now planning to expand into Spain.

“When expanding internationally, dealing with banks can be very slow and complicated, and the situation becomes even worse when they cheat you with hidden fees.”