BoE Interest Rates: What It Means for UK Businesses

BoE Interest Rates: What It Means for UK Businesses

The Bank of England increased interest rates again last week in hopes of abating stubbornly high UK inflation, sluggish economic growth and fragility in the global banking system.

In an attempt to ease the turbulence, the BoE interest rate has now risen to 4.25% - up from the previous 4% - and is the 11th consecutive hike in a row. The move follows the recent turmoil in the international financial system.

Firstly, triggered by the failures of Silicon Valley Bank and Signature Bank, which led to the US Federal Reserve further raising US interest rates recently. And secondly, the subsequent UBS takeover of Credit Suisse, a move orchestrated by the Swiss government to rescue the troubled global banking giant.

But what does it mean for the UK lending market and businesses seeking funding?

Mainstream lending expected to cool

To shelter themselves from the fallout, many mainstream banks will likely recede lending appetites to shore up their previous stockpiles to make loans.

This tightening in lending criteria will help banking institutions weather the storm, but will undoubtedly make it harder for businesses to obtain the finance they require. Perhaps most worrying of all, recent data by Board International reveals a fifth (22%) of businesses do not have the tools to deal with another interest rate rise.

With this increased pressure on UK businesses, alternative and challenger banks are uniquely placed to fill the lending void. However, lending criteria can sometimes be complex in a constantly changing market, often making it a headache to navigate. Businesses who are seeking funding can make their application process smooth and stress-free by working with a business finance broker who can expertly guide them through.

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Business finance specialists are worth their weight in gold

The prediction that high street banks will move to prioritise healthy balance sheets and clean credit reports is not without precedent. However, despite the UK’s tightening cycle which began in December 2021, there are still options for businesses to access affordable business loans or asset finance to meet business goals this year.

So why are business finance specialists so useful?

During a credit crunch, working with a business finance specialist can be a game-changer as they can bring a raft of benefits and help you face the myriad of challenges when seeking finance for your company.

  • Complex criteria made simple – A business finance specialist will have spent years honing their skills in the sector and will have expert knowledge of the market and lending criteria, no matter how complex. In short, they will find your best fit financial solution quickly, meaning you no longer have to spend hours or days searching the market!
  • Receive your funding quicker - A business finance specialist understands how critical it is for you to receive your funding - and fast! That's why they work quickly, often able to speed up the process either through automatic approvals or speaking directly to the lender for you. Often, this means you can receive your money in as little as 24 hours!
  • They manage your application – Everyone hates having stacks of paperwork to complete - never mind having to run a business at the same time. A business finance specialist will do the leg work for you, so once you have submitted any necessary documents, you can sit back and relax. A specialist will meticulously complete your application, ensuring it is right the first time and submitted correctly.
  • Increased approval rates – Having a specialist fighting in your corner can also be the difference between securing finance or not. Highly skilled at removing obstacles to your approval, they can often leverage relationships with lenders to understand any sticking points, or even opt for manual underwriters so the unique merits of your application can be reviewed.
  • Access to competitive products and interest rates – Not only do business finance specialists have extensive access to bespoke financial products with flexible repayment terms, but they also have the ability to secure competitive interest rates, ensuring you receive the best deal available to you. For example, Millbrook Business Finance has a panel that consists of 100+ of the UK's best business lenders who are more likely to have flexible and friendly criteria. 

Getting started is quick and easy

Business finance experts, such as those at Millbrook Business Finance, can help your business to manage cash flow and reduce overhead costs to maintain profitability during the credit crunch by finding their best fit financial solution - and even better, it's quick and easy to get started.

All it takes is a minute to submit an enquiry and a specialist will be in touch within minutes to discuss your business finance needs. If you need funding to meet your goals this year then submit a quick enquiry or speak to an expert from Millbrook Business Finance today on 0333 015 3301.


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