By Paul Morgan, managing director, Able CF.
When interest rates shift, whether it’s up or down, the ripple effect is rarely just theoretical. It hits real businesses, with real people at the helm, making real decisions under pressure. It’s not something you read in the FT and shrug at, it’s the stuff that changes your next move, affects your margins, and sometimes keeps you up at night wondering how you’re going to make that cashflow stretch a little further.
At Able, we speak to business owners and finance teams every day who are grappling with the practical implications of a lending environment that has been in flux for years and still is. The past few years have taught us all to expect the unexpected – a pandemic, supply chain chaos, interest rate hikes, inflation, geopolitical shocks – and all the while, businesses are still trying to grow, hire, invest, and get paid on time.
What I’ve noticed this year, in particular, is that interest rates are sitting in this awkward middle ground. They’re not eye-wateringly high, but they’re not particularly comfortable either. We’ve seen clients with existing variable-rate loans suddenly finding that their monthly repayments are nibbling away at working capital they thought was safe. Others are nervous about committing to any new debt at all, just in case rates jump again and pull the rug out from under them. It’s a cautious time, and I don’t blame them.
But what we’ve found – and this is where the value of independence really comes in – is that there’s still plenty of flexibility in the market if you know where to look and you know how to match the right funding solution to the right business need. That’s where we come in.
Your business doesn’t stop needing finance just because the rates aren’t perfect. If you’ve got a VAT bill due, if you need to restock before a seasonal rush, or if your main customer has just extended payment terms from 30 to 60 days, you still need to bridge that gap somehow. What we’re doing more of this year is helping clients structure that borrowing in a way that gives them confidence and control.
Fixed-rate loans, for instance, are proving popular again. When you’ve got a stable monthly repayment figure, it’s easier to forecast, plan, and sleep at night. We’re also seeing more businesses turn to asset finance – it’s more efficient to spread the cost of machinery, IT, or vehicles over time than to burn through your cash reserves in one go. If that same kit is helping you deliver more sales, it becomes a smart move.
There’s also been a noticeable increase in demand for revolving credit facilities and invoice finance. For the right kind of business, these can be brilliant tools. One gives you flexible access to funding without tying you into a long-term loan, the other turns your sales ledger into working capital. We’ve had a number of recruitment firms and manufacturing clients use these products to ride out tricky patches in recent months – and in many cases, it’s not just saved them, it’s unlocked opportunities for growth.
I always stress – it’s not about the cheapest rate on the market, it’s about the right solution for your business at the right time. That might mean paying slightly more in interest but gaining flexibility or speed that pays off tenfold in the wider scheme of things. It might mean accepting a short-term facility now, knowing you can refinance on better terms later. It’s not one-size-fits-all – and it never should be.
We don’t sell products at Able – we solve problems. That’s the bit I love most about what we do. It’s why our accountant partners trust us with their clients, and it’s why our long-standing customers keep coming back when they hit the next financial challenge. We’re not tied to one lender, and we’re not chasing commission – we’re here to find the right fit, based on where your business is now and where you want to take it.
So if you’re sitting there wondering whether it’s the right time to borrow, or what kind of finance might work best for the next stage of your journey, let’s have a conversation.
