Rising Interest Rates Affecting Small Businesses in 2023...

The cost of borrowing money for businesses has been increasing and it’s only going one way, and that is up due to inflation. Increased demand for borrowing leads to a rise in interest rates. Businesses that have variable loans would be best placed to clear the debt as soon as possible. Businesses that are looking to take out new loans, or restructure existing loans, are inevitably going to pay higher interest rates.

Though many small businesses find themselves in a surprisingly strong financial position thanks to their cash buffers and access to widespread government support during the pandemic, continued inflation may diminish their purchasing power and make the cost of borrowing more expensive, meaning lenders will need to be prepared for lower demand. With rates constantly rising in 2022, small business owners may reevaluate if they actually need the capital at such a high-interest rate before filling out that application.

Whether a bear or bull scenario happens, it’s best for lenders to be as prepared as possible for the potential impacts of inflation on businesses and their need for lending credit.

By leveraging intelligent document automation, small business lenders can gain the agility they will need to cope with either scenario.

For more information on our top picks for the best alternative lenders to use in 2023 click here (link)