The Outlook for 2024

2023 was a challenging year in the commercial finance space, both for those operating in it and those accessing investment. It was certainly a year of highs, just not in the way any of us would like it. High interest rates, high cost of living and high inflation led to a drop in investment appetite and less attractive funding offers compared, with previous years.

The significant increase in interest rates has certainly made completing deals more challenging. This is down to a number of factors, including low business confidence, uncertainty over future rates, and the perceived high cost of borrowing currently.

Whilst many working within the industry consider the current cost of money to be fairly normal, looking at a broader timeline, the anchoring effect caused by the many years of artificially low interest rates has led some business owners to be shocked by current borrowing costs. It may take some time for customers to readjust their expectations with regards to what costs they can realistically expect to encounter in the market.

The good news is that markets suggest the rate of inflation is beginning to fall, which could see a reduction in interest rates and a generally more positive economic outlook in 2024. Let’s hope this year will bring stability to the market place and allow UK businesses to invest with confidence and thrive. If you need support in accessing funding for your business, please get in touch.