Rates Are on the Rise. You Could Be, Too
April 14, 2022
Let’s preface this post with the following disclaimer: What you’re about to read is not a scare tactic like the one traditional lenders use to put borrowers in seats across from loan officers. Consider this a heads-up, though.
While businesses and consumers alike have enjoyed historically low rates in recent years, we’ve all heard rumblings of rate hikes. And yet, rates remained relatively consistent (consistently low) even as a global pandemic and supply chain constraints tested our resilience. Quite possibly your business, too.
But this time feels different. If analysts are correct, we could see the Federal Reserve increase rates several times in 2022. In fact, they already have. And if inflation continues to rise, we could see more hikes ahead – the chair of the Federal Reserve, Jerome Powell, even said as much.
So what does that mean for businesses looking to acquire new equipment critical to their operations, or for their operations to grow? Spoiler: It’s not all doom and gloom.
Before we cover how Acquipt can help you lock in rates today to secure the equipment you need for tomorrow, let’s talk a little more about today’s lending climate and the impact rate hikes can have on getting a business loan from a bank.
It’s no secret that inflation and rising prices have put a pinch on consumers everywhere dollars are exchanged – at the grocery store, at the pump, and even at the dealership, where we’ve seen a trend of used cars selling for more than new ones. Commercial equipment is not immune, either. The same thing happened last year in the new and used equipment markets.
The current rate of inflation is unlike any we’ve seen in decades, going back to the 1980s when interest rates soared above 20%. It’s the primary driver behind the Fed’s rate hike decision. And if history repeats, as rates rise, banks will tighten their purse strings and their lending policies while passing costs along to customers, which will in turn deter borrowing.
Though commercial lending standards remained favorable into Q3 of 2021 as demand for business loans stayed consistent, inflation has also been consistently rising. As inflation rises, the buying power of the U.S. dollar continues to diminish, making equipment purchases using cash assets tricky.
Here’s where bypassing the bank in favor of a nontraditional lender that can fund faster with more lending flexibility (and a more flexible approval process) could make perfect sense for your business right now. Because – big picture – rates remain low and it’s not too late to capitalize while we’re still near the apex of opportunity.
Additionally, financing now can help offset some of the exposure related to cash purchasing by ensuring a fixed monthly payment with consistent repayment terms that never change, so there are no surprises come the first of the month. In the frenzy of uncertainty when access to capital is more important than ever, that kind of predictability is always appreciated.
With specialization and experience serving the manufacturing, transportation, agriculture, medical and storage industries (and more), our team at Acquipt can get creative with financing solutions that are catered specifically to your business to acquire new equipment or expand your fleet. And with term lengths anywhere from 6 to 60 months, we can create a repayment plan that works for you.
Because we’re more than financing – whether you’re making a small equipment acquisition or a multi-million-dollar transaction, we offer advising and consultation through all steps of the process until you have the assets you need.
Contact our team today to learn more about our capabilities in helping businesses just like yours, request a quote, or simply chat. The information you need to make an informed decision about financing could just be a few clicks and a conversation away.