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The high cost of borrowing following a series of interest rate rises, combined with fears of further hikes is stopping small businesses in Swindon from achieving their growth plans, according to commercial law firm, Rowlands.
Interest rates currently stand at 5.75 per cent and analysts are predicting further rises in the months to come. According to Paul Matthews, head of commercial at the firm, these further increases could restrict the growth of smaller companies, while pushing those with large loans or overdrafts into administration.
“Rate rises discourages investment particularly among the smaller business community which tends to work on tight margins,” said Matthews.
“It is much more difficult for smaller firms to absorb short-term fluctuations in costs. To protect their businesses, management should investigate fixed-rate loan options, which will protect them given the current economic uncertainty and high cost of borrowing.
“It is important to remember that the economy as a whole will be affected if small businesses fail to achieve their ambitions because of increasing interest rates.”
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