The Bank of England has gone ahead with the much-anticipated rise in interest rates from 0.5% to 0.75%, but what does this mean for businesses, investors and the property market?

Managing Director, Dan Smith, gives his reaction of rising interest rates….

“Obviously this will increase costs of finance if your business loan is linked to Base rate (if you have debt), however based on the lending criteria, the banks will have built in an contingency for interest rate rises and with a rise of only 0.25% the business shouldn’t find this too onerous. This who have LIBOR linked lending will probably find that LIBOR will follow suit shortly.

On the flip side the fact the rates have risen should give a bigger confidence to the market and it is a sign of strength but again I think the smaller more local business won’t feel any effect of this and they will only be burden with an increase monthly cost.

Those business that have borrowed in the last 10 years will be used to low base rate (and it still is by the way), and those who have borrowed money before this time will have been used to much higher rates and still this as a period of cheap money.

Cashflow is still ‘King’ for any business so constantly reviewing the monthly costs is important so you may find that business increase their prices to match the increase debt costs.

We are always happy to work with business who may be worried about what might be ahead.”

If you would like any more information regarding interest rates or how South West Business Finance could assist you with your finical needs, feel free to contact our expert team.