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Fed Bond Buying Ends on Positive Outlook

Fed Bond Buying Ends on Positive Outlook

The U.S. Federal Reserve has finally ended its unprecedented bond buying program, thanks in part to a positive outlook for the U.S. economy – a good sign for owners looking into operating capital loans.

“On balance, a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing,” the Board of Governors of the Federal Reserve System stated in a recent media release. “Household spending is rising moderately and business fixed investment is advancing, while the recovery in the housing sector remains slow. Inflation has continued to run below the committee’s longer-run objective. Market-based measures of inflation compensation have declined somewhat; survey-based measures of longer-term inflation expectations have remained stable.”

While some economic experts were worried regarding the ending of the Fed’s quantitative easing program, others were assured by the central bank’s confident tone.

“In short, [the Fed’s statement was] largely as expected, but, if anything, a more positive tone, at least on the labor market,” Jim O’Sullivan of High Frequency Economics was quoted as saying by The Wall Street Journal. “We expect tightening will start by June 2015, but, of course, that will depend on the data.  For now, there is no urgency for officials to use the statement to signal an imminent move.”

For small business owners, the question now may be whether obtaining business loans will become more expensive. Some expect interest rates to increase significantly following the end of the Fed’s bond buying program.

However, rates remain accommodative. Additionally, small business owners have plenty of alternatives to traditional loans when it comes to financing their operations.

Alternatives give small business owners greater choice

One popular substitute for a more traditional business loan is a merchant cash advance. With this option, borrowers can receive up to $250,000 with no collateral required, no fixed payments and no hidden fees or upfront costs.

For many small business owners, merchant cash advances are preferable thanks to their unique repayment terms. Owners receive the cash they need for a fixed dollar amount of their future credit card sales. This means that at the end of every day, an automated process retrieves a small fixed percentage of daily credit card transactions until the advance is paid off.

In this way, businesses only repay their loan when they get paid, making it far easier to handle debt obligations.


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