More interest rate hikes can be ahead depending on the trend of inflation and that uncertainty is what is causing concern amongst some small business owners. Though some business owners may not take out loans or instead invest their own money into their ventures, rising interests rates could still have an impact on decisions to buy new equipment or real estate or anything that may require additional capital.
That is the case for small business owners such as Dan Freeman, who owns Le Torte Dolci bakery and Salato Deli on North Fountain Avenue in Springfield and Crust & Company at COhatch along with his wife Lisa. The couple does not anticipate an immediate impact to them due to a rise in interest rates. However, it is unclear what the consequence of those rising rates will be as it depends on how much those rate increase and for how long. Freeman said it could mean that starting new ventures in the short term could be a little less attractive.
Rising interest rates can also have an impact on the real estate market. The local housing market has been described as hot sellers one over the past few years. That was due in part due to low interest rates combined with limited housing stock. Those conditions not only have an impact on the buying and selling of residential properties, but it affects commercial properties as well.
But, Young said that the increase is predicated on combatting high inflation. So the hope is that once inflation comes down, interest rates will also decrease.