Opinion

Tech companies must stop waiting for interest rate relief

Start-ups crave low borrowing costs because it makes investors more likely to back them, but they must take decisive action now that rates could remain high.

Ben BuckinghamContributor

Nov 25, 2024 – 11.00am

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It is a truth universally acknowledged that technology companies’ fortunes are disproportionately tied to interest rates. There were many founders nervously watching the Reserve Bank of Australia’s November meeting, who were left disappointed when the cash rate was held at 4.35 per cent – maintaining a 12-year-high.

While we’re unlikely to see further hikes, the RBA minutes released last Tuesday made it clear that Australians can expect interest rates to remain high for some time. Tech companies and start-ups now need to stop thinking wishfully about rate relief and take decisive action.

Ben Buckingham is the founder of Primary, a treasury management company.