Is RBS shutting down your business bank account?
RBS have recently written to their Business Banking clients - and told them to find another bank.
Turning away clients with business worth £billions seems a strange thing for a bank to do – but it comes as a consequence of the government’s bailout of RBS in the financial crisis of 2008.
As a condition of the financial support they recieved, RBS made a commitment to help increase competition in UK business banking and decrease their own market share. They therefore need to close a large number of accounts and transfer customers elsewhere.
It means that those businesses who are RBS customers with a turnover of less than £25 million will need to find another bank.
It does mean disruption – but there is some good news
Moving a business bank account means inconvenience and disruption, but RBS have made some arrangements to soften the blow. An incentivised switching scheme - Business Banking Switch - has been designed to provide customers with a range of offers, which could range from free banking to cash incentives for switching.
The Incentivised Switching Scheme is intended to encourage small business customers to move their accounts from RBS. It will see £275m of funding given to market challengers to support their offers to small business customers. There will also be a further £75m from RBS to customers to cover switching costs.
Some 11 Challenger Banks will be financed under the scheme and as many as 3% of all SME businesses in the UK may be able to benefit. The offers are currently being described as ‘better’ than those normally available for businesses moving banks.
RBS say that switching will not be mandatory but that the rewards for so doing will make a change of bank very worthwhile. So while moving your bank account may be disruptive, it does mean that you should be able to take your choice of extra benefits from the businesses who are competing for your account.
What should you do?
If you are a business or commercial banking customer of RBS with an annual turnover of £25,000,000 or less, you should receive full notification later this month – along with offers from the banking organisations that are taking part in the scheme.
RBS have promised to work with affected customers to switch banks and need some help as to who is the best bank for your business.
Getting the finances you really need
Finding the right bank and right funding solutions are crucial for you and your business. A switch in your banking provider could be a positive move and provide you with a new range of services from a challenger bank that is hungry for your business. But remember, whether or not you are affected, whatever bank you work with will only ever be interested in promoting their own products.
It can mean missing out on some of the best deals when it comes to business finance.
At Rangewell, we take a very different approach. Instead of locking you and your business into a single financial supplier, we can search the entire lending market for the funding solutions you need.
We work with every type of business and find solutions for every type of business finance need. We will work with you to understand your needs, use our expertise to identify the most appropriate way to answer them - and then use our knowledge of UK lenders to find the most cost-effective deal for you.
Whatever your business finance needs - and whatever the choice you make about your the bank that provides your business account - the Rangewell service is ready to provide unbiased expert help with getting the funding you need. Our service is free, and we are always ready to talk.
Why not put us to the test today?