MEMBER TALKS
HOW TO PRIME YOUR BUSINESS
for Higher Interest Rates
SAMUEL CUMMINGS Associate Vice-President and Market Lead CWB in Ontario
Rising interest rates and soaring inflation, along with the lingering affects of the COVID-19 pandemic, are affecting every aspect of the Canadian economy. Sound financial planning and personalized advice continues to be your essential tool in a volatile market. As Associate Vice-President and Market Lead for CWB in Ontario, I share some thoughts on the challenges facing business clients today.
Q: How is inflation impacting the business owners you work with? SAMUEL: There’s an element of sector specificity to this. For certain clients, higher prices are impacting their ability to obtain supplies and deliver their products and services on time. Inflation is also affecting their ability to forecast profitability and revenue. On the other hand, some sectors – insurance, for instance – are very comfortable with higher rates and the improved profitability outlook they bring. That said, we know the concept of “lower for longer” does not apply anymore when it comes to rates.
Q: How are businesses dealing with rising rates and higher inflation? SAMUEL: For many companies, the challenge right now is how much of their increased costs – whether because of higher interest rates or input costs for materials or services or labour – can they pass along to their customers. We have had some clients who have decided to lock in, but others are taking a more wait-and-see approach. Even if companies have to absorb rising costs, some see fixed rates as tying their hands.
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CONNECT | 2022 ISSUE 3
