SavvySME Official

How will your business be affected by interest rate rises?

Almost every expert says the interest rates will go up within the next few years. How will your business be affected? - Badly affected. I will run in trouble! - Moderately affected - Slightly affected - Doesn’t bother me at all


5 Answers

Deborah Vella

Doesn't both me at all. I'm taking a long term view with my business and aim to grow organically for the first few years at least. I can see how the rises will negatively impact businesses who have recently gone through a large expansion or growth phase.

Tom Valcanis

Possibly for me if other businesses tighten their budgets to service debts instead. It's a bit of a worry.

Marcus Tjen

As we don't use leverage in our business it doesn't bother us at all.  Mortgage interest rate is another story though.

Helene Liatsos

Helene Liatsos Owner at Home Office Management Experts

If your business has loans or credit cards, the interest rate is highly important. This is money you pay out of pocket so the lower it is the better it is. What I try to do each month is pay more than the interest rate charges/minimum payment due....even a few dollars will help lower the principal on the account. If possible, look into getting a credit card with a lower interest rate or refinancing the loan. Another thing I try to do is to pay cash for items that I need so I am not constantly loading up the credit card. Best, Helene

Jef Lippiatt

Jef Lippiatt Owner at Startup Chucktown

This wouldn't currently impact me as I'm bootstrapping all my financing myself. However, I can see how if you were carrying significant inventory or trying to expand your business this could be a very negative impact.

My suggestion is that if known interest rates will be going up but haven't yet, you need to fast track your plans and lock in the lowest possible rate you can while they exist. It may seem scary to speed up something like that, but the payoff could be great but non-existant if you wait... just something to think about.