Businesses shunning loans because of high interest rates

Companies in any country need funding in order to expand and banks play a major part in ensuring enterprises are able to grow.

However, it seems that many firms in Australia are unhappy with the business banking options being made available to them and are shunning credit packages as a result.

The Australian Bureau of Statistics recently indicated that commercial financial commitments declined throughout the nation in January and a new study conducted by DBM Consultants appears to back this up.

It found that the number of small and medium-sized enterprises considering opening a new lending account fell to 10.4 per cent in November 2011 from 14.4 per cent in June 2010.

Many business owners cited the wide margins between the cash rate and interest rates being offered by the country's banks and lenders on their loans.

The research also suggested that many small firms are looking to switch their bank account provider, as they believe there are better deals out there.

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