It’s fair to say that the global markets have fluctuated a whole lot in the past decade. From the financial crash, to the uncertainty of Trump and Brexit, it’s been difficult to place your finger on how things are going to go.
For a would-be business owner this might sound a bit frightening. It isn’t, though, and small business is catching up after a sales lull in 2016. Whether you’re new or looking to grow, we’re going to walk you through what you need to know about business finance in 2017/18.
Loans and Credit
The most accessible and familiar way of securing cash flow for your business is credit. Small businesses continue to rely on loans, and the British Banks Association reported an upturn in small business loans in the first quarter, 2017. However, the fallout from the 2008 crash – still felt acutely in the UK via austerity – mean that some consumers are having poor luck in obtaining credit. If you’re in this situation, the good news is that UK and European law are allowing for more liberal lending, as demonstrated in this Finnish example.
Inflation vs Interest Rate
Not just business owners but everyone will have seen that the UK inflation rate has risen to 3%, the latest peak in year-on-year rises. As a rule of thumb, inflation is good for those looking to borrow, as while inflation stays high but the interest rate stays low, your loan will swell a little less.
An interest rate hike is expected, however, so if you’re looking to borrow and have good budget management skills, you can be sure that right now is the best time to borrow.
Aside from the classic trends and theories important to business finance, there’s been a huge amount of innovation in fintech, with the UK business a behemoth. Consumers are being transformed, too, with the widespread use of money management apps on smartphones.
What does this mean for the business owner? Well, you need to keep one eye on the technology news. From disruptive technology like blockchain transforming transaction cycles – for purchasing and lending – to those aforementioned money management apps creating savvy consumers.
Small business is finally getting the huge boost it needs to give the industry a big push. Loans and credit are once against accessible as lenders relax their rules, and the market seems to finally be settling following years of uncertainty – all of which can be to your advantage.