Small Business Minister Margaret Quirk has expressed concern for small business owners in the wake of the latest interest rate rise.
“The effects of five interest rate rises since the last Federal election will now start to show in the spending power of over-committed households,” she said.
“Small business can expect this latest increase to result in a tightening up of customers spending patterns.
“The decision of the Reserve Bank of Australia to raise interest rates by 0.25 per cent will impact on consumers, and small businesses need to prepare for this.
“While the small business sector has been enjoying the benefits of the State’s buoyant economic conditions and are in a more secure position than other States to ride the wave of interest rate hikes, they should be cautious of over-commitment.”
The Minister suggested small business operators re-assess their operating costs and make changes where necessary.
“Now is a good time for small business operators to review their financial arrangements, rationalise long and short term loans for the most cost-effective outcome, and, if necessary, adjust their profit margins,” Ms Quirk said.
“Renegotiating bank finance can now be done without incurring mortgage duty on existing loan amounts, following the State Government’s tax relief measures introduced in January last year.”
Ms Quirk said it was likely that many Western Australians would have taken advantage of the State’s high property prices and borrowed against equity, either to put into their business, or for household spending.
“Small business operators who are concerned about the impact of this interest rate rise on their business, should use the services provided by the State Government through the Small Business Development Corporation and the State-wide Small Business Centre network for impartial, confidential business advice.”
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