The majority of experts anticipate that theinterest rates will go on rising in 2019 and 2020. Do you need business financing such asa high risk business loan to grow your company? Where can you get it easily and affordably? What to expect from rising interest rates? The answers to all these questions are found in the lines below.
Interest Rates Are on the Rise
Merchants typically need small business loans to start a business, obtain inventory or equipment, acquire real estate, or expand their business. The National Small Business Association reports that 69% of small businesses used financing in 2016. This includes loans, credit cards, venture capital, and crowdfunding. The other 31% were unable to getthe necessary financing.
In June 2018, the Federal Reserve raised the Fed Funds Rate to 2%. This was the 2ndincrease in 2018. Taking into account the strength of the economy, the Federal Reserve is going to raise the rate twice more in 2018. This will lead to increased interest rates by banks, thus resulting in increased costs for merchants to borrow money.
Namely, banks and lending institutions are expected to raisethe interest rates from 1.75% to 2%.In addition, the central bank projectedthe appropriate policy path in June. So, the rates will be 2.4% by the end of 2018, 3.1% by the end of 2019, and 3.4 by% the end of 2020.
High Risk Business Loan from Alternative Online Lenders
Alternative online lending is surging in popularity. The data from the US Small Business Administration shows that small business bank loans totaled almost $600 billion in 2015. At the same time, alternative lending reached $593 billion, and today, it’s even more popular.
The most recent increase in interest rates speaks of confidence in the economy. If rates are really going to rise again, this will mark the 4thincrease in a year. The rise in interest rates is also expected to continue next year.
According to S. Michael Sury, a financelecturer at the University of Texas at Austin Small businesses, small businesses should be aware that there exist multiple channels to borrow funds. Alternative online lenders are a great option to go for.
With a reputable alternative online lender or business funding provider, you can enjoy the lowest rates and the best terms for your own specific business needs. A respectable alternative online lender will get you approved for a high risk business loan or another type of financing without difficulty.
If you compare alternative online lenders with commercial banks, you’ll see that the former ones offer greater flexibility concerning business loan requirements. Their application is fast and hassle free. So, even those merchants who have bad or no credit can get approved for a business loan from an alternative online lender.
Given the current situation in the field, it’d be better for small businesses that expect growth in 2019 to borrow money now, without waiting forthe next year. Next year, the rates are most likely to go even higher.
Author Bio:As the FAM account executive, Michael Hollis has funded millions by using business funding (e.g., high risk business loan) solutions. His experience and extensive knowledge of the industry has made him a finance expert at First American Merchant.