Yesterday, we hand delivered a submission to HM Treasury asking for an APR4SMEs. We think this is best achieved by a legislative change, and have suggested that the Chancellor includes appropriate language to this effect in his 2016 Budget Statement this March.
We make reference to the fact that with a big drop in the number of business overdrafts provided by banks, businesses are being forced into complex finance alternatives which make comparison difficult and end up costing them a lot more than they expect. We also cite the findings of the Competition and Markets Authority investigation into SME banking, which shows that it’s very hard to compare SME finance prices (they couldn’t do it themselves!) and that one of their proposed remedies to improve competition, a SME price comparison website, is hard to do without a standard definition of price, i.e. an APR.
Note that HM Treasury are asking members of the public for their Budget 2016 ideas via a singe question survey. We have submitted our request for an APR4SMEs and encourage you to do the same. It takes 2 minutes and will close to new submissions this Friday, 29 January.