Interest rates come down: how could this affect your finances?
The Bank of England recently reduced its base interest rate to 4.5%. What does a drop in interest rates mean for you, your business and your financial opportunities?
The Bank of England recently announced a drop in the UK base interest rate, with a drop from 4.75% to 4.5%. The final impact of this drop can be both positive and negative for your small business, so it’s worth understanding the effect that interest rate changes can have.
Let’s take a look at how a drop in interest rates may affect your finances.
Reduced cost of borrowing
Lower interest rates on loans. This directly translates to lower interest payments on your existing loans and potentially more favourable interest rates on any new loans you take out.
Increased access to credit: With lower borrowing costs, you may find it easier to secure financing for expansion, investment in new equipment, or to overcome and present challenges.
Improved cashflow
Reduced debt service: Having lower interest payments frees up cashflow. This can be used to reinvest in the business, used for marketing, or distributed to shareholders.
Increased consumer spending: Lower interest rates help to stimulate consumer spending. This can mean increased demand for goods and services, higher sales and boosted revenues.
Better opportunities for investment
Lower cost of capital: With cheaper borrowing costs, you can invest in growth, including research and development, technology upgrades or hiring new staff.
Increased confidence: Lower interest rates can boost investor confidence. This makes it easier for you to find investors and raise capital through equity financing.
Economic growth
Stimulate the economy: Lower interest rates can boost economic growth by encouraging borrowing, investment and consumer spending. This creates a more favourable environment for your businesses to thrive in. A stronger economy = a more stable future.
Get the funding to secure your business' future
Investing in your business's future is a vital step. With interest rates currently lower, now could be the time to consider borrowing and implementing your 2025 strategy.
Talk to the team about your growth plans and how these interest rate changes may impact your business. We’re here to help you reinvest, grow and keep on evolving.
Get the funding to secure your business' future
Get in touchRelated Articles

Making your business work for you: passing the business to the next generation
How do you get your business ready to hand on to the next generation? Key steps for adding value to the business and getting an exit strategy in place
Read On
Setting goals for you and your business for the new financial year
If you are thinking about your business goals for the financial year ahead, we can help you establish measurable goals for your business.
Read On
Increasing costs for UK small businesses: how to control your cashflow
More than half of UK small businesses (57%) predict rising costs over the next 3 months. 4 ideas to help businesses reduce the impact of inflation.
Read On