Poll reveals broker fears for SME investment with further Base Rate increases
United Trust Bank’s most recent broker sentiment survey has revealed that 61% of brokers operating in the fields of asset and property finance believe that it would take just one more 0.25% increase in the Base Rate for it to potentially stifle SME investment. 70% felt that such a move would also negatively impact the residential property market.
However, the research, carried out amongst 108 brokers, found that 37% of respondents felt that a Base Rate of 1% would have little to no effect on SME investment and 28% of brokers indicated that in their view a Base Rate of 1% would have little to no effect on the residential property market.
What would happen if the Base Rate was increased to 1% or more?
Predictions – SME Investment Broker view
It will stifle SME investment 61%
It will have little to no effect on SME investment 37%
It will stimulate SME investment 2%
Predictions – Property Market
It will negatively impact the residential property market 70%
It will have little to no effect on the residential property market 28%
It will positively affect the residential property market 2%
Martin Nixon, head of asset finance – United Trust Bank, said:
“FLA figures indicate that the asset finance sector continued to grow in the first half of 2018 but it is too early to tell if the recent Base Rate increase has had any impact on SME borrowing for investment. The asset finance market is extremely competitive and, from our own perspective, UTB has experienced above average business levels so far this summer, assisting a wide range of businesses to acquire and refinance a variety of assets.
“Responsible business owners will have factored in some eventual upward movement in interest rates and with funders continuing to offer attractive terms and forward-thinking SMEs still wishing to take advantage of opportunities, I don’t think there would be a major setback were another increase to come about later in 2019. If, however, the Bank of England were to announce another Base Rate hike this side of Brexit, that combined with continued uncertainty over our future outside of the EU, may well cause some businesses to pause and take stock.”