It may be Friday, but the Friday feeling has sadly faded away for many businesses this week as The Bank of England announced yet another rise in interest rates.
At it’s highest since 2008, the interest rate has risen to 5% – taking a very unexpected move for the countries financial state. The inflation rate in the UK is just below 9%, and with a target of just 2% the Bank of England have advised that a rise in interest rates is crucial to bringing inflation back down.
If you’re a business owner, we understand this may leave you feeling uneasy and frustrated, particularly if you have variable-rate finance products on the books.
So, what next for interest rates?
Moorgate Finance are here to support you in any way we can, allowing your business to thrive even through these financially challenging times.
Borrowing money during a season of higher interest rates may initially seem counterintuitive, but when you delve deeper it can have some important benefits to turn your business around and avoid unnecessary pressure from interest rates. Let’s explore them.
Secure Lower Interest Rates?
Interest rates are at the highest for 15 years, and there’s no predicting what will happen next. Borrowing the money you need now at a fixed rate could help to secure you for the future, should rates continue to rise even higher.
Smart Investments
It’s all about making smart decisions for your business. If you have an investment opportunity lined up that is likely to generate returns higher than the interest rate on your finance agreement, then it makes sense to borrow the money, invest the funds and pay back the loan with your returns.
Debt Consolidation
Many stable businesses still have debts, its part of being a business owner. Start to build a consolidation plan of how you can pull all these together on a lower rate. Paying interest on one repayment plan rather than several is likely to save you money in the long run.
Protect Cashflow from fluctuating Interest Rates
Cash is king, that’s a fact for every person on the planet. As a business owner, there is likely to be high and low seasons in the industry you’re working in resulting in fluctuating pressure on cashflow reserves. Business finance solutions can help to protect against a loss in cashflow to cover things like outstanding invoice payments and large capital investments.
Our team of finance experts can help to provide solutions that mitigate the impact on your cash flow and business success.
- Hire Purchase Agreements
- Leasing
- Business Loans
- Refinancing
- Bridging Loans
- Invoice Finance
Business finance and fixed rates can give you a bit of breathing room and help you to regain control of your monthly outgoings, without taking away from cashflow.
Moorgate Finance are rated ‘Excellent’ on TrustPilot.
- Customer-led finance solutions
- Sector specialists
- We plan for your tomorrow
- Unrivalled speed, service and efficiency
- Authorised and regulated by the FCA
The Bank of England interest rates are next being reviewed on Thursday 3rd August 2023.