Bank of England’s interest rate rise: How to protect your business.

Today the Bank of England announced an increase in its benchmark interest rate from 0.5% to 3.50%. 

You might be wondering how this will affect your business. Can it afford the increased interest payments on its loans? Were you planning to borrow money and are unsure how possible this will be right now? 

In general, the availability of debt finance (and the cost of it) can vary depending on a variety of factors, including the overall state of the economy, the creditworthiness of the business, and the type of funding being sought.

Whilst you can’t control the overall state of the economy, there are things that you can do to improve your chances of getting funding that works for your business.


What can you do to manage your company’s borrowing?


1. Look into consolidating your debt. You may be able to get a lower interest rate when you roll multiple loans into one single loan.

2. Negotiate with creditors to try and get more favourable terms on your existing loans

3. Focus on improving your cash flow and reducing expenses in order to better manage your debt obligations

4. Build a cash reserve to reduce reliance on borrowing to cover unexpected cash shortfalls or to take advantage of growth opportunities

5. Consider your refinancing options by looking at alternative ways of borrowing money. Asset finance and invoice factoring are two often overlooked ways of borrowing that can be good options when lenders are more cautious about lending.

6. Work with an accountant and financial advisor to identify the best strategies for you.

How can we help?

We can help you put strategies in place to improve your cash flow. We can also help you access loans by connecting you with our financing partner, Capitalise. If you want to find out more, get in touch.