It’s always nice a publication like Black Enterprise reiterates a point that we at Supplierty News have been making for months.
According to a recent article by Black Enterprise, now is the perfect time to pursue a loan, before the Fed increases interest rates.
There are two big reasons for the promotion of loan applications. The first is the imminent increase of interest rates while the second deals with loan approvals hitting record highs since the 2008 Recession.
Currently, the federal rate last rose in June from 1.75% to 2%. “The Fed anticipates that the rate will be 2.4% by late 2018, 3.1% by the end of 2019, and 3.4% as 2020 comes to a close.” This is important as the federal funds rate which points to “the amount which banks charge each other for overnight loans” can have a real affect with the cost / repayment price of your loan. To pay less over a 12 month term, getting approved now is key.
According to Biz2Credit Small Business Lending Index , the “July approval percentage for big banks—those with assets of $10 billion or more—jumped two-tenths of a percent from June’s figure of 26.1% to 26.3%. The findings are based on Biz2Credit’s monthly report, which analyses over 1,000 credit applications made by small businesses via Biz2Credit’s online lending platform.”
With big banks approving over a quarter of small business lending, and with other banks such as regional / community banks approving loans of almost half of its applicants (49.7%). This is the highest since 2014.
Once again, now is the time to purse a loan. I do believe September may see an increase in interest rates, but believe that this will only increase over the next 12 months once again.