The new Cambridge & Counties Bank One Year Fixed Rate Business Bond follows on from the bank’s 30 and 95 Day Notice Business Accounts, which currently pay 1.95% and 1.75% Gross/AER respectively.
Gary Wilkinson, chief executive officer at Cambridge & Counties Bank, said: “We are already attracting significant deposits through our 95 and 30 Day Notice Accounts from a wealth of businesses across the UK. We are now delighted to add this limited offer table-topping One Year Fixed Rate Business Bond to our range. However we must stress that this is a limited offer and customers will need to move quickly to grasp this opportunity.”
The Cambridge & Counties Bank One Year Fixed Rate Business Bond runs for a 12 month term from opening. Accounts are linked to a nominated current account and withdrawals are made by transfer to the nominated account only on maturity of the bond. Interest is calculated on a daily basis and paid on maturity.
Cambridge & Counties Bank has a unique structure being jointly owned by Cambridgeshire Local Government Pension Fund and Trinity Hall, a College of the University of Cambridge. They each own 50% of the bank, which has a strong management team led by chief executive Gary Wilkinson who has held a number of senior roles in the banking and building society sectors.
Small businesses could save themselves nearly £16.5billion a year by taking simple steps to cut costs, without impacting on service or staff, according to new research by Clydesdale and Yorkshire Banks.
Despite rising fuel and energy costs, more than half of all Small and Medium Sized Enterprises (SMEs) admitted to reviewing their day-to-day costs only once in a calendar year. Those same businesses admitted they could probably be getting a better deal if they tried but lack of time, or misplaced loyalty to their current suppliers meant they were unlikely to do so.
Surprisingly, nearly one in seven SMEs admitted to never regularly reviewing the costs for their largest areas of expenditure.
Electricity and gas prices have risen by 69 per cent and 87 per cent respectively since 2005, and the Government predicts prices will rise a further 26 per cent by 2020 compared to today’s prices. The average price of motor fuel has risen 44 per cent in the last seven years.
More than 40 per cent of businesses said that, excluding salaries, materials and supplies represented the most significant cost for them last year. Fuel, IT, rent and energy bills were also significant and, together with materials, represented around nearly half of all SME expenditure.
Earlier this month Clydesdale and Yorkshire Banks introduced a series of measures designed to help businesses grow by lowering some of their costs – introducing fee-free lending for growing businesses and a new switching package with free day-to-day banking for businesses with an annual turnover up to £2m.
Paul Shephard, director for business and private Banking at Clydesdale and Yorkshire Banks, said:
“Keeping a watchful eye on overheads is crucial to ensure business growth and profitability. With difficult trading conditions it can be easy to lose sight of some of the simpler ways of helping your business, but regularly reviewing costs should be top of the to-do list for any SME owner or manager.”
Last year, those SMEs (businesses with less than 250 employees) that reviewed their regular costs saved, on average, £11,385, by adopting straightforward measures such as implementing energy-saving policies or moving to a paperless office. And with the UK’s average yearly salary just over £25,000 – those cost-savings could be ploughed back into the business in the form of new jobs.
Paul Shephard continued: “Small businesses are facing daily cost increases, energy bills alone have risen by more than three quarters. Even relatively simple measures, such as making sure computers are switched off at night, rather than left on standby; all go towards bringing costs down.”
Businesses who deposit a minimum of £25,000 will receive a rate of 3.10 per cent AER (3.10 per cent gross, 2.48 per cent net) on their entire balance, which includes a limited edition 0.20 per cent reward payable for 12 months from the account being opened. After 12 months interest will revert to a competitive 2.90 per cent AER for all balances over £5,000.
Businesses can invest any amount from £25,000 to £2,000,000 and can continue to add funds into the account, up to the £2,000,000 limit, while the product is available. The interest, which can be paid into any account where the customer is named, can be paid gross or net – whichever fits the tax status of the business.
Philip George, interim CEO of Shawbrook Bank said: “In challenging economic times it’s more important than ever that businesses have access to competitive rates on savings, just as personal savers do. Unfortunately the reality is quite different – the business savings market is underserved, and we know that many businesses end up leaving their spare cash sitting in a current account earning little or no interest.
“We launched Shawbrook Bank last year with a commitment to helping small businesses develop and grow. This applies as much to our business savings products as it does to our small business loans. We’re a traditional bank and we believe in straightforward, practical products that offer competitive rates.
“Some businesses may not be aware that notice accounts can form a key part of good financial planning. Using a 100 day notice account for cash needed later for VAT and PAYE returns can make a significant difference to a business over one year – for example, a business that deposits £25,000 into our new account could earn £775 in interest in a year.”
For business savers with less than £25,000 to deposit, Shawbrook also offers a 100 day notice account paying a similarly impressive 2.90 per cent AER. In addition, Shawbrook offers a 1 year fixed rate business savings bond for businesses and a 100 day notice charity and trust account, as well as a range of savings products for personal savers.
A new bank targeting established small to medium sized enterprises (SMEs) has launched. Cambridge & Counties Bank will provide SMEs with loans secured against commercial property as well as a highly competitive deposit account. In addition to this, it will also offer secured pension scheme lending, and has plans to launch professional firm financing, as well as other competitive savings accounts into both the retail and non-retail sectors.
The bank has a unique structure being jointly owned by Cambridgeshire Local Government Pension Fund and Trinity Hall, a College of the University of Cambridge. They each own 50 per cent of the bank, which has a strong management team led by chief executive Gary Wilkinson who has held a number of senior roles in the banking and building society sectors.
The bank feels that now is an opportune time to launch, because many SMEs are finding it difficult to secure finance. Analysis of industry data by Cambridge & Counties Bank reveals that in the second half of 2011, over 60,000 loan and overdraft applications from SMEs worth as much as £3 billion, were rejected by banks. New research from the bank reveals that 47 per cent of businesses believe that their relationship with their main business bank is only average or bad.
Gary Wilkinson, chief executive, Cambridge & Counties Bank said: “We have been able to build a very strong and experienced management team, and launch at a time when many robust SMEs are finding it difficult to secure finance. There is also a real need for increased competition in the banking sector.
“By placing a significant focus on developing a partnership type relationship with our clients through being easy to do business with and by focusing on plain English and transparency, we hope to have a significant impact on our markets.”
Mark Hoban, financial secretary to the Treasury, welcomed the announcement, saying: “I’m pleased to support a new bank that will focus on lending to the SMEs that make up such a vital part of the UK economy. The Government remains committed to fostering more diversity in the banking sector, so we need new banks to enter the market to provide consumers and businesses with greater choice.”
The one year bond which received a four star Moneyfacts rating can be opened via the Society’s Cambridge based Customer Contact Centre or in one of its 18 branches based in and around Cambridgeshire.
Andy Lucas, commercial director at The Cambridge says: “This is part of a range of competitive products for businesses wanting to save with a trusted Society.
“We are pleased to be able to offer great products as well as providing a bespoke service to businesses, councils and community and charity organisations in our Cambridgeshire heartland and nationally.
“We will continue to look at ways to offer products and services that meet business customers’ specific needs.”
The account can be opened and operated with a minimum balance of £5,000 and has a maximum balance limit of £2 million. New and existing funds can be transferred into the account via debit card, bank transfer or cheque.