The Effect of Interest Rate Hikes on Small Business

By the time you see the late news, you'll know backwards and forwards that the Federal Reserve Bank didn't raise short-term interest rates, but may do so again in August.

In the meantime, how does this affect small business? More and more CPAs and accounting professionals rely on the small guys for their bread and butter income, so what kind of effect does a rate hike really have on the economy for the small business owner?

Plenty, most of which has to do with financing the start-up or new business venture. Rising rates are heavily linked to a perceived lack of venture capital and funding for start-ups.

With six hikes in the last year totaling 1.75 percentage points, it's easy to see why small business owners are sweating, and why the big guns with the money aren't willing to fork it over just for the promise of future profits.


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