This week we saw the Bank of England raise the interest rate for only the second time in a decade from 0.5% to 0.75%.
But what effect could this have on businesses and business finance?
For consumer-facing businesses the worry now is that the interest rate rise could affect household spending. In particular, discretionary spending on luxury items could be dampened, hitting already fragile high-street businesses.
However, the Bank of England forecasts economic growth of 1.4% this year and 1.8% next year, showing an expectation that consumer spending will not be significantly affected.
Manging your cashflow
Businesses should pay particular attention to their cashflow, so as not to be at risk from any short-term changes in spending.
At a basic level, businesses should ensure invoices are send out promptly and late payments are chased up. Businesses may also review creditor payment terms potentially extending these if possible.
If there is a time delay between payments to suppliers and receiving money from supplies, a short-term business loan may help you bridge the cashflow gap. Talk to our team about how we can help you find a suitable business loan.
A higher interest economy means that the banks may increase borrowing rates, which could filter through to private lenders. This means you may wish to consider restructuring existing borrowing to improve your borrowing rates and terms.
Searching for the best business finance options
This also means that it is important to search around when choosing to take additional business finance.
At The Funding Store we put businesses in front of an extensive panel of funders to finance a competitive solution. We cut out the time needed to search for your finance and the headache of completing significant paperwork otherwise involved in multiple applications.
With no upfront cost or obligation for our service, we are ready to help you find finance for your business. Speak to our team of experienced advisors today.