Small business owners are collectively breathing a sigh of relief at the Federal Reserve’s decision to cut interest rates. CNBC and SurveyMonkey’s Small Business Survey for Q3 found that owners said lower interest rates will lead them to increase investments, expand their business, or increase inventory. The poll was taken from a national sample of 2,276 self-identified small business owners ages 18 and up online.

Main Street has been closely monitoring interest rates. Data from the National Federation of Independent Business, a small business lobbying group, found interest rates on short maturity loans stood at 9.5 percent in August of this year, up from 7.6 percent in January of 2023. In addition, 60 percent of owners said they were not interested in borrowing right now, due in part to high rates.

Lower rates can free up resources for owners to allocate to other areas of their business, including remaining competitive on hiring, according to Holly Wade, director of the NFIB’s Research Center. “That would be a great benefit for them to see if they can’t be more competitive in that space on wages and benefits and ease up some of those cost pressures that they’ve been dealing with for the last three or so years,” Wade told CNBC in an interview.

Closely tied to interest rates is inflation. One in three small business owners in CNBC and SurveyMonkey’s survey believe that inflation has peaked. But two-thirds still believe it will continue to rise. 38 percent say inflation is the biggest risk to their business, nearly three times higher than the next biggest risks, consumer demand and interest rates.

In addition, overall confidence increased in the quarterly CNBC/SurveyMonkey poll to 51 out of 100, up four points from last quarter and nine points from the same quarter last year. This boost in confidence reflects growing optimism among business owners who may be anticipating greater stability ahead, potentially enabling them to make strategic decisions for growth. As businesses assess the evolving economic landscape, many are cautiously optimistic that the interest rate cuts will offer some financial relief while allowing them to better manage the ongoing challenges of inflation and hiring.