The Impact of Federal Rate Hikes on Small Businesses

by | Oct 16, 2023 | Business Finance, Business Strategy, Resources, Small Business | 0 comments

The Impact of Federal Rate Hikes on Small Businesses

According to Kevin O’Leary, one of the most influential figures in the finance sector, the recent rate hikes imposed by the federal government have put small businesses in a precarious position. It’s becoming increasingly difficult for small businesses to borrow money, not because they lack credibility but because the rates and the payments are too overwhelming.

In simple terms, small businesses struggle to qualify for loans instrumental in achieving their goals. This results in a significant liquidity crisis, and without access to funding, the inevitable next step is layoffs.

Preserving Small Business Amid Financial Crisis

However, it’s not all doom and gloom. O’Leary suggests that small businesses explore government tax credits and support programs like the Employee Retention Credit. These initiatives can be a lifeline during tough financial times, providing the necessary financial relief to keep operations running and avoid letting go of valuable employees.

Rethink, Replan, and Relaunch

O’Leary also recommends adopting a more conservative expansion strategy in the current financial climate. He advises against a rapid multi-state expansion. Instead, focusing on a smaller, more manageable growth plan can prevent overextension and maintain financial stability.

So here’s the takeaway for all small business owners: start thinking smaller, plan wisely, and, most importantly, make each day count.

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