In August 2023 we find ourselves with a bank of England base rate of 5.25% with the Monetary Policy Committee (MPC) due to sit again on Thursday 21st September. It is at this stage predicted by a number of economists that base rate will increase to 5.5% at this stage.


These rising interest rates are putting a significant amount of cash flow pressure on businesses who are carrying borrowings on a variable rate of interest and we are generally seeing businesses who are running with term loans, overdrafts and some items of HP running into cash flow problems especially as the expensive, cash hunger winter months bite.


We have been working with a number of clients looking at the structure of their borrowings giving specific cognisance to the duration of the loan as well as the structure. One of AMC ‘s unique selling points is the ability to borrow money over a period of up to 30 years and by looking at stretching existing loans out over a longer period of time, there is a greater ability to mange cash flow pressures.


Likewise we are reviewing the structure of a number of businesses loans and we have had instances where borrowers with fixed rates have in fact broken their loans, benefitting from a break gain and restructuring the loan over a longer period of time. Although their new interest rate maybe higher, these specific businesses had circumstances following the introduction of younger partners to the business were able to restructure on to a longer term and reduce cash flow pressures.