Bank charges for overdraft borrowing increased by 10% to £8.8 billion last year, Business Moneyfacts reports.

Small and medium-sized firms are suffering because all the major banks have put up their charges either by increasing their interest rates, the daily charge for an unauthorised overdraft or the cost of sending a stroppy letter.

Lee Tillock from Business Moneyfacts told This Is Money:

"There is a wide range of fees associated with an unauthorised overdraft on a business current account.

"Charges can range from £4 to £30 per day or up to £30 per debit, a potentially costly mistake for any business to make."