Fortunately, there are options that help your business thrive even in tough times. Here are some ways our team recommends navigating rising interest rates.
Evaluate Loan Structures
You should meticulously explore loan structures and gain a comprehensive understanding of terms and conditions. Opting for fixed-rate loans can provide a measure of stability in times of volatile interest rates. These loans maintain a constant interest rate throughout the loan's lifespan, providing a hedge against uncertainty.
Strengthen Financial Management
Taking a proactive stance toward financial management is crucial. Establishing and maintaining a robust cash flow, along with ample reserves, can serve as a cushion against the burden of elevated borrowing costs and economic uncertainties.
Explore Alternative Financing
Not all financing avenues are equally affected by rising interest rates. You can consider alternative routes such as grants, crowdfunding, or equity financing, so you’re less reliant on loans to mitigate the effects of heightened interest rates.
Negotiate with Lenders
Open communication with lenders is pivotal. In the face of rising interest rates, you should have constructive conversations with your lenders. At United Bank, our team works closely with business owners to help them find the plan that works best for you and your goals. This could entail negotiating for more favorable terms or exploring the viability of fixed-rate loan options, which can serve to stabilize loan repayments.
Adapt Growth Strategies
Adapting to evolving financial landscapes is a hallmark of successful entrepreneurship. Despite rising interest rates, strategic changes can help businesses continue to grow. This might encompass diversifying revenue streams, streamlining operations for optimal efficiency, and maintaining a relentless focus on productivity. Our team also offers business services, treasury management, and additional resources to help you and your business grow. Visit United Bank’s lending services page for more information.
While small business finances are always changing, the influence of economic forces is almost always out of your control. As the Federal Reserve raises interest rates, you need to take careful consideration and proactive measures. Also, having a financial team you trust is a great way to understand and stay ahead of changing economic landscapes.
While challenges are certain, if you remain well-informed, adaptable, and committed to cultivating robust financial practices, you will undoubtedly be better poised to handle the impact of mounting interest rates on your loans. By staying strategic and resilient, you will emerge stronger, securing your business’ long-term success.
Questions? Visit or call your local branch and talk to a business and lending expert about navigating rising interest rates.