For small businesses, the effects of the recent interest rate rise will be noticeable in all areas of your business. The following top tips highlight the steps that could be taken to protect your small business.
Plan your finances
The recent interest rate rise will affect how small businesses loan money
Your consumers will spend less as they borrow less
This scenario could mean that your small business will make less sales and less profits
By planning your finances in advance, you can highlight your business’s reliance on loans and interest that will be paid
Other means of financing your business should be sought
Need to assess whether to loan money now or in the future
Plan your cash flow
Forecasting cash flow in advance will give you good insight into your financial position
Due to the increase in interest charged on loans your cash flow might be affected
Keep your expenses to the lowest possible value to protect your cash flow available
Assess impact of increase in interest rates to your business before increasing expenses
Business growth strategy
Utilise savings to increase your small business’s growth
Hold off taking out bigger loans until your financial position is more secure
Help your small business grow by decreasing expenses
Look at decreasing prices of goods/services if consumer demand decreases to remain competitive
Advantage of Fixed rate loan
Fixed rate loan will provide funding without the increase in interest
This will also protect you from future interest rate rises
This type of loan should be secured in the future in case of further interest rate rises