As economies around the world fluctuated their way through the last year, Australia was no exception to the strains on its economy. Australia’s interest rate currently remains on hold at a historic low of 0.1 percent, as the nation prepares to rebound from the economic battering caused by the global pandemic.
However, companies and governments face rising borrowing costs as the Reserve Bank of Australia fails to suppress bond yields and the strong Australian dollar, despite the central bank’s aggressive $3 billion of bond purchases last month.
Official interest rates have always had an impact on business owners throughout the country, however, they are more important to those running small and medium-sized businesses. This is because the interest rate naturally impacts the costs of borrowing money or taking out finance, and therefore the costs of running their businesses.
Companies and governments face rising borrowing costs as the Reserve Bank fails to suppress bond yields and the strong Australian dollar, despite the central bank’s aggressive $3 billion of bond purchases on Thursday. https://t.co/08ub02wdrp
— Financial Review (@FinancialReview) February 25, 2021
Most SMEs rely on some form of finance or loans in order to fund their business activities. Small and medium-sized businesses can sometimes struggle to meet their cash commitments, such as payments to vendors, or investing in new technology or extra assets for their growing businesses. Business loans are a great way for SMEs to have a normal cash flow available, in order to get on top of outgoings while growing, yet not needing to reduce control by selling down equity.
Currently, with the low-interest rates in Australia, it means that borrowing can be more affordable, which is a great opportunity for small and medium-sized businesses to take advantage of their access to finance options. When interest rates are lowered it reduces the cost of borrowing and usually makes repayments more affordable.
It is important for small and medium-sized business owners to be aware of the impact that interest rates can have on any finance
“It is expected that as the interest rate decreases in Australia, it could easily spur SMEs to consider financing and borrowing options, and even borrow more than they originally would have, if interest rates were higher.”
Since interest rates are always going to be out of your control as a small or medium-sized business owner, it is more important to focus on what you can control, such as the lender you choose to help finance your SME. Finding the right lender can sometimes be difficult, as your options can be limited. Some lenders will choose not to lend to or make it extremely difficult to lend to an SME, so you need a non-bank lender like Grow Finance.
Grow Finance makes the process easy, with tailored solutions to suit your specific circumstances. If your SME needs finance to assist, and you don’t have access to a bank lender, or do not have time for the lengthy approval process, then a non-bank lender such as Grow Finance is your best option.
The Grow Finance loan approval process provides a faster alternative to bank lenders and you can have those funds readily available, so you can get back to running your business with the ability to grow and expand.