On January 17th, 2018, the Bank of Canada increased its overnight rate to 1 1/4 per cent. This followed increases on July 12th, and Spetemeber 16th of 2017. In Canada, the prime rate is a guideline interest rate used by banks on loans for their most creditworthy, best, or “prime” clients. The prime rate rises and falls with the ebb and flow of the Canadian economy, influenced significantly by the overnight rate, which is set by the Bank of Canada.
As a result, the prime rate, at Canada’s major banks and financial institutions now sits at 3.45%.
Here are some questions to consider if you are a business owner:
- Are you cognizant of your overall borrowing costs?
- Are you carrying floating rate debt which you may want to consider locking in at a fixed rate?
- Are you preparded if interested rates continue to rise?
- What will you have to do to offset those increased costs?
These are simple questions but they should not be overlooked. As rates have been historically low for some time, we cannot underestimate the economy’s sensitivity to higher rates going forward.
Here is the schedule of upcoming annoucements taken from the Bank of Canada webiste:
Schedule for 2018
|January 17||Interest rate announcement and Monetary Policy Report|
|March 7||Interest rate announcement|
|April 18||Interest rate announcement and Monetary Policy Report|
|May 30||Interest rate announcement|
|July 11||Interest rate announcement and Monetary Policy Report|
|September 5||Interest rate announcement|
|October 24||Interest rate announcement and Monetary Policy Report|
|December 5||Interest rate announcement|
As a business owner your costs of borrowing is a key component to your success, so don’t let those increased costs add up and impede your bottom line.
At Labrecque Business Consulting we are here to help you!
With decades of banking expereince we would be happy to have a look at your current banking arrangements and offer our opinion as to how you can save money and improve your financial position.
Let’s keep the conversation alive. Let’s talk!
Visit our website at mikelabrecque.com or give us a call at 778-835-0091.
“We have a passion for business and a desire to help”