- Abolishes value dating charges, saving average customer over £3,800 per annum
- Launches new contract eliminating termination fees
- Challenges industry to follow innovative approach
Metro Bank SME Finance today announced that it will abolish both value dating and termination fees, providing customers with immediate and significant savings.
Metro Bank SME Finance have eradicated the cost of ‘value days’ for all new and existing customers. This is contrary to the majority of the industry who charge a value day amount, meaning that once a customer has reduced their borrowing balance, interest is still charged on the higher balance for a specified number of days. This adds significant cost to a customer’s borrowing, but is rarely included on disbursement sheets.
Richard Saulet, Director of Metro Bank SME Finance, commented: “This change demonstrates our commitment to providing clear and fair fees in a market where this has not always been the case. By eliminating value days, our customers will benefit from a substantial saving instantly. An average customer with an annual turnover of £6.7 million, being charged 3% would pay an additional £3,865 per annum with a lender who withheld value for debtor receipts over a five day period. I would strongly encourage all businesses who use invoice finance to challenge their lender and check when they receive full value for their debtor receipts. ”
Alongside this change, Metro Bank SME Finance is also launching a new contract which removes termination fees. The ground-breaking contract provides customers with certainty of funding for a 12 month term, whilst simultaneously allowing them to give only 28 days’ notice should they wish to leave early, without incurring any termination fees. The contract additionally includes a substantially reduced ‘collect-out’ fee, charged at 10% of the outstanding borrowing amount when applicable.
Saulet continued: “By effectively killing termination fees and providing clarity around the amount of money customers would pay in the event of a collect out, we are making a substantial and long term commitment to the market.”