As we navigate an uncertain economic landscape, it’s crucial to stay informed about the various financial decisions affecting our lives. One such decision is the interest rate hikes, which can significantly impact the borrowing options for small businesses. In this blog, we’ll discuss what the recent federal interest rate hikes mean for small business owners and how an alternative lender like ByzFunder could be a better option.
The Federal Reserve System, aka the Fed, is responsible for setting interest rates in the United States. The federal interest rate, also known as the federal funds rate, is the rate at which banks can borrow money from the Fed. When the federal interest rate increases, banks pay more to borrow money from the Fed. This increase in borrowing costs trickles down to consumers, who pay more to borrow money from banks.
In recent years, the Fed has raised interest rates to prevent inflation from getting out of hand. The latest hike occurred in March 2023 when the Fed raised the federal funds rate by 0.25% to 2.50%. This increase may seem small, but it can significantly impact small businesses looking for financing.
Small businesses rely heavily on borrowing to fund their operations. They often need loans to purchase inventory, hire employees, and expand their operations. When interest rates rise, it becomes more expensive for small businesses to borrow money, making it harder for them to finance their operations.
Moreover, when traditional lenders such as banks raise their interest rates, all their loan products are affected. This means that even if a small business is looking for a fixed-rate loan, it will still face higher rates due to the overall increase in borrowing costs.
At ByzFunder, we understand the challenges small businesses face in securing financing. That’s why we offer an alternative to traditional lenders. Our online platform provides fast, simple, and secure access to funding without the bureaucratic red tape of traditional lending.
But what sets us apart from traditional lenders is that we do not raise our interest rates when the federal interest rate hikes. Our rates remain the same, providing stability and predictability to our borrowers. We offer a range of bespoke business financing options to meet your business’s unique needs, from short-term financing to merchant cash advances.
As a small business owner, you must stay informed about financial decisions affecting your business’s bottom line. The recent federal interest rate hikes can impact your borrowing options, but don’t let that deter you from finding the right financing option for your business.
We offer honesty and transparency to small businesses looking for financing, making us a reliable alternative to traditional lenders. So why ride the interest rate hike roller coaster when you can choose ByzFunder instead?