With Interest Rates Above 9%, Small Businesses Slam the Brakes – WSJ

With borrowing costs double their levels from just two years ago, many small businesses are pulling back, another sign of how higher interest rates are cooling the economy. 

Some entrepreneurs are postponing equipment purchases and expansion plans, while others are delaying hiring, rethinking loan terms or stepping up efforts to collect payments on time. Keeping borrowing costs in check and managing cash flow is an added challenge for business owners already dealing with labor shortages, inflation and economic uncertainty.

The average interest rate small businesses paid on short-term loans has stood at 9% or higher over the past three months, according to the National Federation of Independent Business, up from 6.7% a year earlier and 4.6% in August 2021. The Federal Reserve voted unanimously this month to leave rates unchanged at a 22-year high but didn t rule out future increases. 

via www.wsj.com