The time I honestly thought the interest rate hike had nothing to do with me

Hello, this is Takemura, an administrative scrivener.

Recently, I have been seeing the phrase “Bank of Japan interest rate hike” in the news quite often. To be honest, at first, I just thought, “That’s a topic for big corporations or people with home loans, right?” I was convinced that it was a matter that didn’t really concern the disability welfare business operators around me.

But after looking into it, I realized it might not be someone else’s problem after all, which is what I want to write about this time.

🔖 Table of Contents for this article

• Why a “world with interest rates” affects small business operators
• What becomes clear when considering it alongside “prices, taxes, and subsidies”
• What I can do as someone who supports business startups and operations

Why a “world with interest rates” affects small business operators

The Bank of Japan has been raising its policy interest rate in stages, and in 2025, two rate hikes were implemented, accelerating the trend of rising interest rates. With the rate hike on December 18-19, 2025, the policy interest rate was raised from 0.50% to 0.75%, which is the highest level in about 30 years since 1995.

Following this, the average “estimated procurement interest rate” for small and medium-sized enterprises in fiscal year 2025 became 1.29%, an increase of 0.20 points from 1.09% in the previous fiscal year. Moreover, it has exceeded the previous fiscal year for three consecutive years, reaching the highest level in nine years since fiscal year 2016 (1.37%).

You might not get a sense of it just by looking at the numbers, so let me use an analogy. I think this is the same feeling as “the interest rate on a home loan in your household budget is gradually rising without you knowing it.” It’s like when you feel secure with the repayment amount you had when you signed the contract, but in reality, your monthly burden has been slowly increasing. Business loans are the same; if you brush off the news of interest rate hikes as “not my concern,” you might find that your cash flow is tighter than you expected when you finally notice.

In fact, in one survey, it was announced that the Bank of Japan raised the policy interest rate from 0.50% to 0.75% on December 19, 2025. Furthermore, if corporate borrowing rates rise by 0.25% from current levels, it is estimated that the interest payment burden will increase by 640,000 yen per year per company, pushing down ordinary profit by an average of 2.0%, and potentially causing an additional 1.6% of companies to fall into an ordinary deficit.

What becomes clear when considering it alongside “prices, taxes, and subsidies”

Another thing I personally think here is that it is useless to look at interest rates in isolation. Prices are rising, the minimum wage is rising, and on top of that, borrowing interest rates are rising. From the perspective of a small business operator, I feel that the current situation is one where costs are rising simultaneously from multiple directions.

Of course, I am not in a position to judge whether the interest rate hike itself is good or bad. The validity of economic policy is outside my area of expertise, and I believe that consultations regarding actual changes to loan conditions or cash flow should be discussed thoroughly with tax accountants and financial institutions. What I want to say here is a more fundamental point. Do not stop thinking by saying “it has nothing to do with me,” but first understand your current cost structure. Just by doing that, your options for your next move should change.

What I can do as someone who supports business startups and operations

As an administrative scrivener, I often work at the “entrance” of businesses through procedures for incorporation and obtaining permits. While I cannot directly do anything about loans or cash flow itself, I can provide materials to help you think about “how much can this cost structure withstand changes in interest rates and prices” while we organize your business plan together.

Personally, I believe that one of my roles is to break down economic news like this together with business operators, even if just a little, rather than dismissing it as “not my concern.” Because when it comes to interest rates, the speed of your next decision is completely different depending on whether you know about it or not.

References

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