Item A Swim to Success Swim to Success (STS) is a programme that teaches young children how to swim
swimmer sade employs swimming instructors who deliver the programme using the
pool facilities at gyms across the North East of England
Information
Number of pools with swimming classes
Price per class per child
£9
5
14
Number of swimming classes per pool per week
8
Maximum number of children per swimming class
Jade set STS up as a sole trader because she wanted to make the key business
decisions herself initially Jade used a bank loan as her main source of finance and
secured the loan against her home which she owns
Jade would like to expand STS. However, she is struggling to raise the finance
herself as her costs are still high to help her manage financially Jade has arranged
an overdraft on her business bank account. She relies on this to pay employees if
the business does not have enough cash at the end of the month. Jade has recently
received a letter from the bank explaining that interest rates on bank loans and
overdrafts are going to increase
Analyse one effect of the increase in interest rates on STS. [6 marks]