It is expected that the U.S. Federal Reserve will increase interest rates increasing consumer borrowing costs. Jerome Powell, Federal Reserve Chairman, is expected to proclaim the central bank’s key interest rate from near zero to counteract the rising inflation. This is in hopes to help small business who have already dealt with heavy debt loans because of the COVID-19 pandemic.
There has been an overwhelming sense of concern from small business owners regarding this expected increase. The U.S. Chamber of Commerce found that 70% of small business owners expressed resounding concern.
The differences between small and large businesses will be seen because of this increase. Many large businesses have already factored in the high interest rates into their capital requirements, while small businesses could be faced with challenges when seeking capital.
Small businesses have noted that 45% of them believe rising costs are their biggest threat. With that being said, businesses who have relied on loans to make it through the pandemic so far might feel further effects of this as the interest rate rises.
On a lighter note, there are agencies out there who are eager and will continue to help those small businesses and offer loans that can be distributed to meet each businesses’ needs.
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