1. The impact on a business of higher interest rates
People may borrow less because it costs more money to pay back the loan
It costs the business more money to pay back any loans
So the business needs to find more money to pay back its loans
The business decides not to invest in new equipment
So people buy fewer consumer goods
So businesses sell fewer products
The business becomes less competitive
The business may make less profit

2. The impact on a business of lower interest rates
People may borrow more because it costs less money to pay back the loan
It costs the business less money to pay back any loans
So the business needs to find less money to pay back its loans
The business decides to invest in new equipment
So people buy more consumer goods
So businesses sell more products
The business becomes more competitive
The business may make more profit