Interest rates come down: how could this affect your finances?

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Written By Kim Manunui

The Reserve Bank of New Zealand recently announced a drop in the official cash rate (OCR). You can read more about the OCR here.

While a drop in interest rates can have both positive and negative impacts, it’s worth understanding how it might affect your business finances.

Reduced Cost of Borrowing

  • Lower interest rates on loans: This means lower interest payments on your existing loans and potentially more favourable rates on any new loans you take out.

  • Increased access to credit: With cheaper borrowing costs, you may find it easier to secure financing for expansion, new equipment, or overcoming present challenges.

Improved Cashflow

  • Reduced debt service: Lower interest payments free up cashflow, allowing you to reinvest in the business, fund marketing efforts, or distribute profits to shareholders.

  • Increased consumer spending: Lower interest rates encourage spending, which can lead to higher demand for your goods and services and, in turn, increased revenues.

Better Opportunities for Investment

  • Lower cost of capital: Cheaper borrowing costs make it easier to invest in growth opportunities such as research and development, technology upgrades, or hiring new staff.

  • Increased confidence: Lower rates can boost investor confidence, making it easier to attract investors or raise equity financing.

Economic Growth

  • Stimulating the economy: Lower interest rates encourage borrowing, investment, and consumer spending, leading to stronger economic growth. A stronger economy creates a more stable environment for businesses like yours to thrive.

Planning for the Future

With interest rates currently lower, now could be the ideal time to consider borrowing and put your 2025 strategy into action.

Talk to your Client Advisor about your growth plans and how these changes might affect your business. We’re here to help you reinvest, grow, and keep evolving.

Kim Manunui

Hi, I’m Kim and I work with a great team to help individuals, as well as small and not so small businesses get their message, product and services to the world using digital media and creating wonderful websites that don’t cost the earth.

I was born in Canada, and grew up around Vancouver and the mountains of British Columbia. My love of pristine environments led me to New Zealand and eventually to the mountains, lakes and rivers of the central North Island which is home. My family’s heritage is here, and it’s from here that Korio traverses the planet.

The digital world is never static and neither are we.

And I say ‘we’ because I work with an awesome group of talented people who I gather together as required to complete a project.  Whatever your business, not-for-profit or individual needs are we gather the best team to get the job done.

Collaboratively we are creative, share sustainable values and work hard for great outcomes because that’s the buzz of satisfaction that drives us.

If you have an audience and market to reach, we can make that happen. Creative design, words that work and smart behind the scenes stuff that cuts through the online noise. We’ll design your website and then build it. We’ll manage the content as well as all your hosting needs. We can handle your online advertising so you get noticed,
and we’ll manage your social media presence so you get the clicks, likes and engagement to grow your business. All within the budget you set, because none of this needs to cost the earth.  And the job doesn’t stop when your website goes live. We are your virtual business partner.

https://www.korio.co.nz
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