Reported on Fri, 10 Feb 2006

Businesspeople and entrepreneurs looking to take out a business loan should do so via an alternative provider, with the major high street banks coming under fire for their consumer practices.

New research by the Halifax predicts that the "big four" high street banks, Barclays, HSBC, Lloyds TSB and NatWest, have cost customers £2.2 billion since 2002.

The Halifax claims that the major banks' practice of only offering the most competitive, low-rate deals to new customers has hit loyal existing customers hard.

The assertion that high street banks have made profits to the tune of £2.2 billion was calculated by taking the 28 million customers that the banks cumulatively had prior to 2000, and speculating how much consumers would have saved if overdraft and credit interest rates were set at 9.9 and 2.5 per cent respectively.

Peter Jackson, managing director of banking and savings for the Halifax, explained that alternative business loan providers "have taken market share by offering real alternatives that reward them for their loyalty".

Mr Jackson added that consumers "have seen the benefits of this approach and will continue to".

Many alternatives to high street banks exist, and there are good opportunities for consumers to secure low-rate business loans.

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