A sharp rise in input costs — energy, materials, wages, finance — can wipe out a margin that took years to build. Reacting quickly and deliberately is what protects the company.
Understand the new margin
Recalculate your margins at the new cost levels so you know exactly where you stand. You cannot price or cut sensibly until you can see the real numbers.
Pass on what you can, cut what you must
Where the market allows, adjust prices to reflect higher costs — customers often expect it in a rising-cost environment. Where it does not, find offsetting savings that do not damage capacity.
Bridge a genuine transition
If there is a lag between costs rising and prices catching up, a short facility can bridge it. But if higher costs are permanent and cannot be passed on, the answer is restructuring, not borrowing.
For a genuine transition gap, a short arrangement or facility can help — talk to us.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: How to cut costs without cutting capacity, Restructuring costs to protect your business, Using short-term finance responsibly in a squeeze.