The interest charges for 2009/10 have been negotiated and agreed at 3.25% (9.0% APR), with trade association members receiving the more favourable rate of 2.75% (7.5% APR). Last year over 4,300 firms chose to pay by instalment.
A working group facilitated by the Financial Services Authority (FSA) and chaired by the Smaller Business Practitioner Panel - which included representatives of several trade bodies - has again selected Premium Credit Limited as the preferred supplier. Premium Credit Limited will guarantee auto-acceptance to all FSA authorised firms up to £50,000.
Mark Norris, chief operating officer at the FSA, said: "I am delighted the FSA was able to help facilitate this successful market solution. The option to pay by instalments is a key part of making the FSA easier to do business with and is especially valued by smaller firms."
Simon Bolam, chairman of the Smaller Business Practitioner Panel, added: “The facility to pay by instalments is an important tool for many small firms. In the current economic climate we are pleased that we have been able to negotiate a deal that provides firms with a realistic interest rate for an automatic loan facility. This is a good example of trade bodies and FSA working together to bring about a positive outcome for firms.”
The FSA is aware that there are other suppliers which provide a similar service, and therefore choosing which supplier to use is a decision for individual firms. However, in line with last year's agreement, the FSA will enclose a Premium Credit Limited application form with a firm's invoice to facilitate the use of this payment option.