2 months ago
In a recent interview with journalist and TV presenter Laura Kuenssberg, Rishi Sunak urged borrowers to "hold their nerve" as the Bank of England (BoE) Base Rate (Bank Rate) climbed to a 15-year high of 5%, as reported by the BBC.
During the Sunday morning politics show, 'Sunday with Laura Kuenssberg', Rishi Sunak said, "I want people to be reassured that we've got to hold our nerve, stick to the plan and we will get through this."
Addressing the current UK inflation rate of 8.7%, which the UK government is trying to reduce to 2%, Sunak also said, "I can tell you as prime minister, the Bank of England is doing the right thing, the Bank of England has my total support. Inflation is the enemy."
Sunak went on to discuss the challenges facing the UK; "I've never said that it's not challenging. I've never said that this isn't going to be a difficult time to get through. But what I want to give people the reassurance and confidence is, that we've got a plan, the plan will work and we will get through this".
Sunak appears to have good intentions to reduce inflation, feeling that the BoE is doing the right thing by raising inflation rates. Sunak has good reason to think this way, as historically, we've seen this approach work, but raising interest rates puts pressure on borrowers.
The BoE Base Rate recently went up to 5%, but they state they'll review it on 3rd August. If you want to learn more about how the rising Bank of England Base Rate affects your business, we recently published an article covering this topic.
Whether interest rates rise or decrease, when thinking about your business borrowing, you should always consider the needs of your business. Higher interest rates are unavoidable, so if a business finance solution is essential, consider which one is best for your business. There are many business finance products, each with different benefits. Subsequently, before you apply, knowing which solution best fits your business's requirements is beneficial.
We've put together a comparison of business loans, invoice finance and credit cards below to demonstrate how useful such a comparison can be:
Flexibility: Credit cards provide your business with a flexible way to finance and manage expenses, inventory and one-off purchases (marketing costs etc.).
Convenience: Besides being flexible, business credit cards are convenient because you can use them almost everywhere without worrying about cash, bank details or less convenient payment methods.
Rewards: Many credit card providers offer rewards programs, allowing you to save on travel and merchandise or get cash back while paying for business expenses.
Borrow more: With a Business Loan, your business can borrow more than you would typically be able to with a credit card. This can be helpful if you need to finance a major purchase or a more extensive project designed to grow your business.
Longer terms: Loans typically have longer terms than credit cards. This can give you more time to repay the loan, making it easier to manage your cash flow.
Fixed interest rates: Some loans include a fixed interest rate, meaning that you'll know exactly how much you will pay in interest each month, helping with your monthly business budgeting.
Fast access to cash: Invoice Finance can enable your business to quickly access cash, which can help you pay suppliers or employees or resolve short-term cash flow challenges.
Less reliant on credit checks: Invoice Finance solutions don't always require a credit check, making them a good option if your business has a low credit score. You can check your Experian Credit Score for free at Capitalise.
Better for cash flow: Rather than requiring a monthly repayment plan like a Business Loan, Invoice Finance funding is secured against your invoices, so it's typically seen as a more efficient way of improving cash flow.
The best finance solution for your business depends on your needs and circumstances.
A Business Credit Card may be a good option if you need a flexible way to finance your expenses.
A Business Loan may be a better choice if you need to access a more substantial amount of money or longer repayment terms.
Invoice Finance may be the best option if you need fast access to funds and want to improve your cash flow.
Ultimately, it's essential to understand your business needs and the business finance solutions you're interested in before you apply.
At BusinessComparison, we've made it easier to find and compare business finance products to help you secure the funding solution that's the best fit for your business. Because we compare finance solutions for you, we save you time, allowing you to focus on growing your business.
We help you compare essential business products and services, ensuring you get the best deal and helping with your bottom line. Save time and money with BusinessComparison by comparing today.