The Governor of the Bank of England recently warned that a no deal Brexit could result in an interest rate rise. This would result from if the pound plunged in value in the aftermath and emergency measures were needed to prop up its value. While nobody is suggesting this worst case scenario is going to happen, it is still worth preparing for the worst if you run a business. The following tips should ensure your business is in good shape to survive whatever happens with interest rates in 2019.
You may already have forecasts of what you can reasonably expect in the year ahead but this planning should include what happens in the event of a 1% rise in the base rate. IF you currently have a business loan how will the extra payments affect the bottom line.
Put cash aside
If your business has plenty of cash in it then it is a good idea to keep a surplus not only to cover tough trading conditions and pay off debts but also to continue to invest in growing the business.
Analyse customer credit ratings
If your customer has bad credit any rise in interest rates will put them under additional pressure. IF you end up relying on their custom and they become insolvent your business might also feel the impact.