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Rising interest rates and high inflation

 How to beat the economic challenges ahead

Capitalise Jul 28, 2022

The Bank of England has increased UK interest rates from 1.25% to 1.75% and has predicted that the UK will fall into recession in Q4 2022. 

This is the biggest jump in interest rates in 27 years and a sign of the serious state of the UK economy. The Bank of England believes that increasing interest rates should help to curb spending and bring stability to the UK economy. But for UK businesses, this interest rate hike is likely to be an added challenge. 

Borrowing could be a lifeline for many businesses over the coming months, as cash becomes tight and the economy becomes more unpredictable. But higher interest rates make it more expensive to borrow – creating a hurdle to funding, growth and future prosperity.

So, what can you do to help your clients leap over these economic hurdles? And what are the practical steps your clients can take to recession-proof their business and keep their business finances on track?

What’s causing these widespread economic issues?


In early 2022, our Get Fit For Business report found that over three-quarters (76%) of UK business leaders were feeling optimistic about the coming year. This future positive outlook will be key to long-term recovery. But having navigated the first half of the year, it’s clear there are external threats for businesses to plan for:

These are significant challenges for your clients. But as their go-to advisor, you can help them better keep an eye on cashflow, their credit scores and those of their customers, to reduce the impact to their business.


1. Make the most of cashflow tools and forecasting


When your clients are navigating tough economic times, it’s sensible to keep a close eye on their cashflow position. If you can keep their cash inflows and outflows under control, that’s good news for their businesses working capital and overall financial position.

Here are some tips for keeping cashflow positive:


  • Use the latest cashflow tools and insights – with our Capitalise Monitor platform, you'll have a real-time view into your clients cashflow, upcoming risks and opportunities. It’s much easier to keep on top of cash when you have these numbers and data visualisations at your fingertips. For all your clients, all in one place.
  • Encourage your clients to run regular forecasts – when your clients know more about their future cash position, the data becomes invaluable. So helping them to forecast is a must. If a forecast shows a cashflow gap in six months’ time, you and your clients have got enough warning to plan, take action and find alternative funding or access savings. Plus watch out for our upcoming Cash & Capital reporting tool which will give small businesses a real-time view of their cashflow.
  • Look at multiple ‘What if…?’ scenarios – scenario-planning helps you manage multiple future outcomes for your clients. What if prices rise by another 10%? What if your clients repayments increase by 13%? Run projections, see the potential outcomes and help your clients plan for them.

2. Help your clients improve their business credit score

Checking your clients’ business credit score on a regular basis helps them to understand the impact this score is having on their performance and growth plans. A high-risk rating is likely to reduce your clients access to trade credit, new contracts and funding. And that’s bad news when high interest rates are already affecting their borrowing.

Capitalise, and the Capital Reports feature that lives within the platform, can help you collaboratively work with your clients to make the most of their credit score:

  • Access your clients credit information - See credit score and risk factors as well as how many searches have been carried out in the last 12 months. 
  • Check your clients credit risk factors - Get notified instantly when CCJs are identified and warnings when your clients’ credit scores change. 
  • Work with credit specialists to help your clients improve their score – our credit improvement partner helps you offer a new service to your clients to open up new lines of credit, both internal and external.

With Capital Report you’ll get a clear overview of your clients’ most important business information, all in one easy to navigate place. It’s shareable with your clients, to help empower them and guide your meetings. 
If you move your clients from a high-risk to low-risk credit score, suppliers and customers will look at their trading relationships more favourably. And lenders will see your clients as a more attractive proposition for offering finance deals at rates which work for your clients.

3. Be aware of changes in your client’s market

Knowing how well your clients’ customers, suppliers and competitors are faring financially can help you better advise your clients and put them in a stronger position when making strategic decisions. But it’s important to encourage your clients to also be on the ball themselves when it comes to changes in the wider market and their own specific sector.

Are their raw material costs continuing to rise? How is this affecting their margins and profitability on projects? Are sales still buoyant, despite the impacts of inflation? Are your clients' customers reining in their spending, resulting in smaller revenues and missed profit targets? Or showing a lower credit score, in which case your client needs to manage their trade credit terms more closely. 

Research with your business clients, refer to industry benchmarking results and focus on keeping your finger on the pulse. This can help you provide irreplaceable strategic advice. 

4. Help your clients access funding strategies, in one place

There’s no way to help your client shield their business 100% from rising inflation and high interest rates. This is a global issue that’s making money tight for multiple businesses. But helping them have a finance facility to call on could make all the difference.

The days when the bank manager was the only route to funding are over. The modern 21st century lending market is growing and evolving, with plenty of options for funding.

When you sign up to Capitalise, you’ll have all the tools to manage your entire client portfolio, in one, easy to navigate place. Plus you’ll have a network of 100+ lenders, with finance products to suit all your small business clients needs. 

Choose from:

Helping your clients obtain a healthy credit score and a positive cashflow makes it considerably easier to find funding. And by providing solutions that match your clients needs and put extra cash in their bank, you’re set to ride out the challenges of high inflation and rising interest rates together - with tangible solutions. 

Sign up for Capitalise, offer irreplaceable business advice and supercharge your relationships today. 



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