As the economy bounces back and the U.S. transitions out of the pandemic, business owners will continue to need access to capital to both recover and grow.
Since federal relief from the Paycheck Protection Program ended on May 31, business owners need to be prepared to seek future financing and look for new options. With this and other potential issues, like inflation, businesses might want to begin investigating alternative lending resources through sources like Great Lakes Business Credit.
Under the current environment, cash flow, through PPP, has been preserved at many businesses, allowing them to continue their operations. Meanwhile, banks servicing commercial loans to these businesses are not feeling pressured to move these accounts off their books.
However, this relationship could all end under a number of circumstances.
Prompted by higher inflation, the Federal Reserve could enact tighter monetary policy by raising the federal funds rate, also known as the discount rate, at which banks lend to each other. This results in restricted credit via higher interest rates at the business as well as the consumer level. A growing number of economists envision this beginning to occur in the first quarter of 2022.
In addition, conditions could be exacerbated should both inflationary pressures diminish consumer confidence, together with higher costs amid scarce inventories.
Alternative lenders such as Great Lakes Business Credit provides business owners a steady hand in funding start-ups, expansions, and other operational expenses during ever-changing economic conditions. Contact us to learn how our lending model can solve even the toughest challenge.
So, truly now is a smart time for businesses to seek alternative lending resources before inflation drives interest rates up and traditional lending sources become less attractive, or worse, unavailable to them.