Interest Rate Hikes and what to do as a Small Business Owners?
In our current economy, inflation continues to stay high. Nationwide, goods, and services remain expensive and sovereign debt abundantly high.
To resolve this macroeconomic issue, the Bank of Canada implements monetary policy. Increasing interest rates to slow our economy down to a more sustainable level.
"As July 13th, 2023 Bank of Canada overnight rate 5% & continues to rise."
Now what does this mean for small businesses?
- Consumption Decreases
- Cash becomes scarce
- Access to Credit: Difficult
With these fluctuation trends in the market, is it important to be prepared & plan, avoiding any unnecessary financial distress.
Top tips
1. Know your financial health
Understand your business solvencies and long-term viability. Check & monitor your Balance Sheet, Income Statement & Cash Flow.
2. Model Scenarios
Running through plausible scenarios is a great way to plan for the unforeseen future.
- What if rates continue to rise?
- What if consumer sales decline?
- Can I cover my debt (credit, loans, mortgage etc..) obligations?
3. Have an emergency plan
Take the what if scenarios and be ready to act. It will be impossible to plan for all, but it is important to have an idea where your business could be impacted most and ensure you are prepared.
4. Access Additional Funds
Reach out. See if you qualify for our small business loans to support cash flow in business declines. Additionally, do your research. Seek out if you qualify for any federal or municipal grants or services.
5. Spend only when necessary
Cut down unnecessary purchases. If you don’t need it now, you can always plan to revisit the purchase down the road.
6. Connect with a development officer
There is no reason to go through this recessionary period alone. Our team is here to help. Contact Info