The surprise Bank of England cut in interest rates early on Wednesday was an emergency measure designed to bolster Britain's economy against the global disruption caused by the coronavirus.
Members of the BoE's Monetary Policy Committee voted to cut the Bank Rate for the first time since August 2016, from 0.75% to just 0.25% - its lowest ever. The rate cut is part of a package of measures to help UK businesses better cope with the economic disruption that is likely with Covid-19.
And it could provide a vital lifeline for your business.
Why the coronavirus matters to business
The coronavirus is already proving a major problem for many businesses - and the expectation is that the epidemic is only in its first phase.
Almost every type of business is already affected:
- Retailers are finding that customers are not coming in
- Importers may find that their supply chain has ground to a halt
- Exporters may report that customers are cancelling orders as their customers are not buying
- Service providers are finding that people are reluctant to welcome them into their home or business
It means a major downturn for almost every business sector. Predicted levels of sales and work will simply not be met, and that can trigger major cashflow problems.
Staff need their salaries. Rent and business rates need to be paid, and most businesses will have commitments such as loan repayments to cover. Even if they cut down on buying in stock and costs such as marketing, the money will continue to flow out, even if their usual income is suddenly not coming in.
How the rate cut can help
The rate cut is designed to help businesses deal with the crisis. It means that borrowing can cost less, and at Rangewell, we can help your business take advantage of the lower rates in two key ways.
First, we can help you find cashflow support. Arranging solutions such as Working Capital Finance and short-term loans can help offer a buffer until the economy recovers.
The new lower rates mean that this type of funding can be more affordable than ever before.
Secondly, we can help you use these rates to reduce your existing loan repayment commitments. Some types of business loan are geared to the Bank of England base rate. These will mean that your repayments will automatically reduce. However, if you currently have any type of finance with a fixed rate, you will not benefit from the rate cut.
At Rangewell we may be able to provide a solution. By helping you arrange refinance of existing arrangements, it may be possible for you to cut your monthly repayment, and take advantage of the lower rates, and also by extending the term of your loan.
Most types of business funding could potentially have reduced costs in this way.
If you think you may have a funding need, just give the Rangewell team a call and our finance experts will be able to look at the most appropriate funding types and the most competitive lenders to help you deal with the current challenges, and make sure the rate cut gives your business the support it needs.
And remember, there is never any charge for using the Rangewell service.
