Laws & Legislation


07 09 2015

Predict Federal Interest Rate Increase

07 09 2015

Trying To Predict The Fed’s Next Move

Owners looking to obtain a business loan or other alternative financing options need to be aware of the larger trends shaping national business affairs. For instance, many expect the U.S. Federal Reserve to raise interest rates, but no one is sure when this will happen. After postponing the decision at its June meeting, the Fed committee tasked with raising the rate left the public wondering when exactly this would happen.

The Fed has kept the interest rate at near zero since late 2008, and market watchers are trying to predict when the central bank will raise its benchmark short-term interest rates. The CME Group FedWatch, an index for tracking market reaction based on changes to the target rate, showed the odds of a September rate hike dropped to a 12 percent likelihood, while a December hike received a 49 percent chance and January 2016, for now, seemed the most likely at 66 percent.

The committee in charge of determining when to raise these rates will be weighing many factors when making their decision, including employment rates, manufacturing output, the strength of the dollar and the Greek debt crisis. These variables, some positive, some negative, are contributing to an inability to accurately forecast the Fed’s next step.

Job growth

The unemployment number decreased to 5.3 percent, the lowest number since April 2008. While this should be positive news about job growth, it instead came with a report that 432,000 people stopped looking for work. While the jobs number is not the primary factor the Fed will use when determining when to raise rates, it’s one of the most significant variables.


June experienced the 30th consecutive month of expanded economic activity in the manufacturing sector, according to the Institute for Supply Management June 2015 Report on Business. The ISM’s index recorded manufacturing rates expanding by 53.3 percent, representing an increase in 0.7 percent. Any reading than 43.1 indicates expansion, which means the 53.3 percent reading is a signal of strong growth and promises steady economy performance. With increased manufacturing rates, businesses are producing more goods for consumers, which involves these companies restocking inventories and continuing the cycle. It demonstrates not only strong business output, but strengthening consumer spending power as well.


According to CNNMoney, Federal Reserve Chair Janet Yellen cited the ongoing Greek debt crisis as influencing the decision.

“To the extent that there are impacts on the euro-area economy or on global financial markets, there would undoubtedly be spillover to the United States that would affect our outlook as well,” said Yellen.

However, others maintain the U.S. economy is rather insulated from the Greek markets, and a CNNMoney survey of economists revealed many don’t expect a direct impact to delay a rate hike. Despite not having direct exposure to Greece, Europe is intricately linked with the country, and if the euro is negatively impacted, it could be felt here in the states.

While the Fed’s interest rates primarily affects short-term lending between banks and monetary policy at the national scale, many small businesses are also impacted by its decisions. As the Fed raises and lowers its interest rates, many other lending institutions also follow suit and increase or decrease their prime interest rates, The Los Angeles Times reported. This isn’t a written rule, but a general trend that many banks and lenders tend to follow.

Small-business owners holding off on expanding into new territories and hiring new employees should consider all available indicators that factor into their financing needs. While lending among banks will be greatly impacted by the impending Fed rate hike, small-business owners can rely on other lending options, such as alternative financing to find working capital. Trying to decipher and analyze the financial tea leaves can be next to impossible, especially when small-business owners are wondering if now is the right time to find financing for business purposes.


Find Out How Much Funding You Qualify For

Fields marked with an * are required
By clicking this button I agree to all terms and conditions.

Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.


US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.


For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.


For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.


Text Messaging:

By providing my wireless phone number to National Funding, Inc., I agree and acknowledge that National Funding, Inc. may send text and multimedia messages to my wireless phone number for any purpose. I agree that these text or multimedia messages may be regarding the products and/or services that I have previously purchased and products and/or services that National Funding, Inc. may market to me. I acknowledge that this consent may be removed at my request but that until such consent is revoked, I may receive text or multimedia messages from National Funding, Inc to my wireless phone number.

The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121. Funding amount and credit approval is subject to a full credit profile review.