How have Fixed Rate Loans affected businesses?

How have Fixed Rate Loans affected businesses?

Some businesses have been forced to pay enormous break fees which have crippled them. In some cases, this has led to insolvency or bankruptcy. Others have been handcuffed by the threat of breakage costs they could not afford high-interest have been stuck paying high fixed interest rates during a recession when their competitors enjoyed low variable rates. Many businesses have struggled to thrive and stagnated because they have been unable to escape their completely inflexible loan.

Even if the inflexibility and high interest rates have only had a minimal impact on business the fundamental problem of mis-selling is no different. Many of these loans have 10, 20 or even 30-year terms. If at any point during those long terms the business needs to break the loan, the bomb they are carrying around in the form of breakage costs will go off.