Interest rate rise – Will it affect you? – Mitchell Lea WagemateFeatured Products Promotional Features
Posted by: The Probe 18th September 2018
So we know that the interest rate recently rose from 0.5 per cent to 0.75 per cent. But what does this mean for you?
Most consumers are in debt, due to either a mortgage or credit cards. The rise in interest rates will mean that they have to pay out more every month, so will have less disposable income and therefore will probably spend less on the high street.
Dental practices could see the impact of this, especially on cosmetic treatments as these might become a lower priority for those patients who need to be more careful with their spending. With regards to routine dental appointments, patients should be reminded of the importance of regular check-ups to ensure that they appreciate the value of their investment.
For practices looking to grow, the higher interest rates will make it more difficult to find capital as loan repayments will be higher and therefore eligibility will be more restricted. As a result, growth may therefore slow down, so business strategies will need to reflect this new economic situation.
It is also worth noting that for any practices currently repaying loans, the increase in interest will affect annual expenses. In fact, research by Hadrian’s Wall Capital – a specialist debt collector – estimates that small and medium sized businesses (SMEs) could be out of pocket by up to £355 million in the first year alone.[i]Only around 16 per cent of SMEs are believed to be borrowing on a fixed rate basis, so the vast majority will be subjected to the increase in repayments.
On the bright side, anyone who is saving will be able to save more and the higher interest rates may even persuade others to start saving wherever they can. This is particularly good news for professionals looking to build their own personal savings.
Adapt to thrive
Adaptation remains the key to long-term success in any business. Rewarding a loyal patient base and attracting new patients with the added value they seek will have only positive consequences for your practice. It is also essential to maintain strict control over business finances in order to avoid any potential issues. Managing payroll efficiently and ensuring the right funds clear for bills and BACS payments will facilitate the smooth daily running of your practice – the Wagemate automated payroll service could be of huge benefit in this area, saving you time, money and hassle with its risk-free guarantee.
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[i]Hadrian’s Wall Capital. Industry News. Small businesses could be hit by £355m in interest charges if rates increase by a quarter. March 2018. https://hadrianswallcapital.com/who-we-are/media/small-businesses-could-be-hit-by-355m-in-interest-charges-if-rates-increase-by-a-quarter/[Accessed August 2018]
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