Saturday March 28, 2020

Banks make SMEs pay much higher rates on loan charges

Small-and-medium-sized enterprises are paying substantially higher rates on business loans than corporates, as banks try to expand their margins, writes Jon Ihle.

17th March, 2013

Small-and-medium-sized enterprises are paying substantially higher rates on business loans than corporates, as banks try to expand their margins and return to profitability.

Lenders are pricing loans to SMEs off their actual cost of funds - which remain elevated - rather than off the Euribor reference rate they use to price corporate loans, according to corporate treasury sources.

With Euribor rates now below even the record-low European Central Bank base rates of 0.75 per cent,...

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