Many of your customers may be experiencing rising interest rates and heightened inflation for the first time. Even established businesses with a history of operating successfully across rate cycles may need your expert guidance to help them put the right finance in place while managing loan repayments and cash flow.
What concerns your customers the most?
The most recent survey of small business owners by CommBank, conducted in February 2023, found that many SMEs believed they were yet to feel the full impact of increasing costs. However, one in three small businesses anticipated a drop in consumer demand, and this was the primary concern of 36% of participants.1
One in five respondents (20%) told the survey that increased costs were already affecting their operations, making them scrutinise costs, delay planned purchases and seek lower-priced suppliers. And nearly a quarter (23%) said that inflation and rising interest rates were having an impact on their business finances, with them paying more on loans, overheads and inventory, while customers reduced their spending.1
How you can help your customers respond
Many business owners will be looking for guidance on the market outlook and how to adjust their financing. You can turn these conversations into relationship-building opportunities by helping your customers’ future-proof their businesses for a rising rates cycle.
1. Help your customers plan ahead
For most businesses, the first step is to create or update cash-flow forecasts, ensuring they can continue to trade profitably as rates rise. CommBank customers can also use the Business Cash Flow View app to see monthly summaries of their incoming and outgoing cash at a glance.
You can support your business customers by helping them to:
- understand the interest rate and inflation outlook, and its potential impact on their expenses
- stress-test their forecasts for different interest rate and inflation scenarios
- model possible responses, including price increases, and identify trigger points.
2. Explain their repayment management options
CommBank finance solutions have features that customers can use to tailor their loan repayments as their business situation changes.
Your customers may be able to use one or more of the following strategies, depending on the type of finance they have in place.
- Switching to a fixed interest rate so they can plan ahead with certainty and protect their business from any future rate increases.2
- Adjusting their repayment schedules to match with cash flow.
3. Help your customers create a cash-flow buffer
Having extra working capital on tap can assist your business customers to safeguard against any unexpected increase in costs. It may give them the breathing space they need to continue to meet current expenses while they adjust their operations.
- With a variable rate BetterBusiness Loan, customers can use any spare cash to make extra repayments, reducing their interest costs, then redraw funds when they need them.
- A Business Overdraft can help customers access funds instantly when then need them, then repay them at their own pace, while only paying interest on the amount they use.
Also make sure to remind your customers they can use CommBank Benefits finder, accessible through the CommBank app or NetBank, to track down the government grants, benefits and rebates they may be eligible for.