Fairer Finance Launches New Business Bank Account Product Rankings to Simplify Savings for Small Entrepreneurs
British independent consumer group and rating provider Fairer Finance has added a new dimension to its product ratings, specifically designed to help small businesses navigate the world of business bank accounts. The move aims to ease a process that can be time-consuming and confusing, particularly for new entrepreneurs.
The group now offers ratings for over 30 product types, including insurance, banking, and credit products, allowing small businesses to make informed decisions about which account suits their needs. Fairer Finance Managing Director James Daley said in a statement, "Our new product ratings are designed to provide a shortcut for entrepreneurs – helping them get a handle on which accounts will prove the best value."
The ratings consider key features such as benefits and costs, including fees that may not apply initially but will be incurred over the account's lifetime. To achieve a five-star rating, an account must offer essential features, be competitively priced compared to its peers, and have reasonable fees and charges, with no more than 15% of products receiving the top mark.
The business bank account ratings are segmented into three categories: high-frequency cash accounts, low-frequency cash accounts, and cashless payment accounts. The goal is to encourage better competition and transparency in the market, driving banks to innovate and support small businesses to reach their full potential and drive economic growth.
The latest move from Fairer Finance comes as small businesses face increasing challenges in accessing external funding. In February 2024, the U.K. Parliament's Treasury Committee reported that over 140,000 business accounts were closed by major banks in the previous year. The closures attributed to risk appetite, financial crime concerns, lack of information sharing, and other factors.
In a separate development, another group – the Centre for Finance, Innovation and Technology (CFIT) – has launched an initiative aimed at helping British small businesses raise external finance. Partnering with Mastercard and Lloyds Bank, CFIT will develop solutions to support companies in accessing vital funding to grow their businesses.
These initiatives demonstrate the growing importance of supporting small business owners in making informed decisions and navigating complex financial landscapes.