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Fixed-rate loans keep private business on track

Staff Reporter 1 minute read

Australian businesses are feeling the effects of the credit crunch but remain confident in their future.

East & Partners principal analyst Paul Dowling said the optimistic outlook of private businesses could be attributed to the effective risk management strategy of fixing lending rates.

“Although lending rates have come up, the effect of this on private businesses has been largely insignificant since the majority of current business borrowings in the SME segment are on a fixed-rate basis,” Mr Dowling said.

According to PricewaterhouseCooper’s (PWC) Private Business Barometer, funding is currently the number one challenge facing private business. Just over half of respondents nominated the availability of credit as a major impediment to meeting targets.

Despite this, barometer respondents reported a strong average profit performance of 13.1 per cent and were optimistic that the medium- to long-term future for businesses remained bright.

Published: 28-05-08

Fixed-rate loans keep private business on track
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