I’m just looking at a temporary overdraft with my HSBC Business Bank Account and I’m shocked at their fees. For a £2,000 overdraft facility (i.e. just for it to “be there” and not necessarily be used) – they are going to charge me £100 (that’s 5%) setup fee and if I do happen to use it, they’ll charge 10% interest (5.50% over base rate of 4.5%) pa on a monthly basis.
Ok, that’s for a 12 month overdraft – I did just want £1,000 for a month (31 days) just to cover the difference in having to pay for things to sell and getting the money for the items from Paypal (they’ve sold, but it takes 5 workings days to get the funds from Paypal). For a £1,000 overdraft for 31 days, it’ll still cost £20.00 (just 2% this time), but still the 10% interest rate!
Ouch!
It’s hardly suprising that so many new businesses go bust in their first year, when this is the level of “support” you can expect from your business banking service.