Small business squeezed by Big 4 banks

The Reserve Bank has accused the Big 4 banks of charging small business higher fees and extracting "fatter margins".

The share that the big banks take of the lending market is now at 75%, which was below 65% before the financial crisis.  Smaller lenders have been pushed out of the market through consolidation, and big bank dominance.

The main reason for high lending costs is the chance that a small business' loan may go bad, and not being repaid back.

Make It Cheaper says: "The simple response to this is, business do have a choice.  Whilst the Big 4 banks hold a dominant share of the market, there are still other lenders out there with competitive rates.

We'd recommend jumping online, and using a service such as InfoChoice to hunt down a new more competitive business loan deal.

Until businesses start voting with their feet and switching away from the Big 4, the message just won't get across.  It's down to the business owners to take action."

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