Following the Bank of England’s decision to lower the base rate to 4.5%, Federation of Small Businesses (FSB) Chair Martin McTague has urged lenders to pass on the benefits to borrowers without delay.
“This rate cut needs to translate into immediate relief for small firms, allowing them to shift focus from survival to growth and long-term planning,” said McTague.
He emphasized that with inflation now at manageable levels, high interest rates have been a major barrier to economic expansion. A sustained reduction in rates would provide much-needed support to small businesses and increase access to finance and lowering borrowing costs. Market expectations of further cuts this year offer additional optimism for business owners seeking affordable funding options.
“Ensuring that small businesses have access to the funding they need to invest and grow is a vital component of a healthy economy. Lower rates will play a huge role in unlocking expansion among small businesses, and we also want the Government to ensure that personal guarantees to limited company directors are properly regulated, so that what should be a business loan does not end up as a personal liability.
“In addition, lower rates on mortgages and personal finance products will give small business owners some much-needed financial headroom, while giving a fillip to consumer confidence, which will benefit customer-facing sectors such as retail and hospitality.
“A financial landscape that encourages small firms to take a chance on a new piece of equipment, bigger premises, or a training course to expand their skills is one that will help to deliver the economic growth that we all want and need to see as soon as possible.”
