The equivalent of three million businesses are not earning any interest on their business savings, according to a new report.
Research by Aldermore found that 62% of SMEs in Britain were not earning interest on their business savings.
The survey also found that of those small businesses that were earning interest, 53% of them were earning less than £300 in interest annually.
Some 65% of SMEs held a business savings account with the same provider as their personal savings.
Financial pressures were cited as the main reason for the lack of interest being earnt on savings, with 40% of those not earning interest not saving a sufficient amount on a monthly basis.
Meanwhile, 33% of SMEs were exhausting their savings before they could gain interest.
“Being a business owner comes with a whole host of challenges, so it is vital that business owners make their surplus cash work harder to provide additional financial support and to strengthen financial resilience,” said Ewan Edwards, head of savings at Aldermore.
“Our research shows over three-fifths (62%) of SMEs are not earning any interest, meaning over three million businesses could be missing out on additional income that would be an added boost when dealing with the multiple financial pressures of running a business; such as cash flow.
“In addition, the research reveals that almost two-thirds (65%) of business owners adopt the habit of having a business and personal savings account with the same provider.
“While this may appear to be the ‘easiest’ option, taking this approach means businesses are missing out on a number of good products on the market.
“We encourage all business owners to shop around to find the best account on offer, as this can make a positive difference in the long term.”
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