Whilst UK interest rates have been kept on hold at 0.25% analysts have suggested that an interest rate rise may be closer than expected; the BBC reports that one member of the rate setting Monetary Policy Committee voted to raise interest rates, making this the first time since July 2016 that the vote had not been unanimous.
An interest rate rise would have significant impact on the many small businesses who have overdraft facilities and loans which are have variable interest rates; any increase in the UK base rate would see interest charges increase, decreasing profits and reducing cash flow.
Small businesses are already experiencing rising costs due to the fall in the value of sterling, causing prices for imported goods and services to rise, and any further cost increases could significantly impact on businesses which are the backbone of the UK economy.
For businesses needing to invest in equipment or machinery costs can be fixed with a Hire Purchase or Finance Lease facility; interest rates are fixed, meaning that any change in the UK base rate would have no impact on monthly payments.
Equally, an asset refinance facility can release cash tied up in existing assets to help with cash flow, to purchase stock or to meet any unexpected costs. Again, monthly repayments are fixed meaning businesses have certainty that any change in the UK base rate would not impact their monthly borrowing costs.
If your business wants to fix costs for investing in equipment or needs to raise cash why not contact us today? As a family-run small business we understand the importance of controlling costs. You’ll be able to discuss your requirements with a real person who has the flexibility to structure a solution for your specific requirements.