Some small businesses have seen steady gains over the last several months, and anticipate their business will grow during the rest of 2013 and into 2014, Reuters reported. Lending standards remain tight, however, making getting a small business loan difficult for entrepreneurs across the country.
Now, small business owners have something else to worry about – rising interest rates. Interest rates have shot up over the past two months, and are now approaching the highest levels since April 2011.
These rates are expected to affect consumers as well as small business owners. Small businesses rely on customers to fuel their profits, and with higher interest rates on financial debts, consumers may spend less.
Michael Muzyk, president of Baldor Specialty Foods in Bronx, N.Y., told Reuters that if consumers feel the effect of higher rates, it will “ultimately have a net effect on us.”
Small business owners recognize slow economic growth has frustrated entrepreneurs for years, and according to Reuters, economists are beginning to agree with this assessment. Some economists projected overall economic growth rate as low as 0.3 percent for second quarter 2013, in response to the 1.8 percent growth in first quarter 2013. In fourth quarter 2012, the economy saw just a 0.4 percent rise over the three-month period.
This growth has proven too slow for many small business owners – hundreds of thousands of businesses have closed over the past several years. Between 2008 and 2010 alone, 170,000 businesses closed down operations, a 2012 Biz Journals report found. Now, with interest rates on the rise and lending standards as tight as ever, many small businesses are struggling to keep their entrepreneurial dreams alive.
Small business owners who are struggling due to weak demand or who are facing other financial difficulties can come to National Funding for guidance. National Funding can offer assistance with getting a merchant cash advance and providing equipment financing options for companies that need an extra financial boost.