EDC SBDC Director Ray Bowman was interviewed on AdvisorSmith about his insight into small business loan interest rates in the coming year.
An excerpt from the article:
What are the effects of low interest rates on small business lending, especially given the reduction in rates over the past year?
Dr. Ray Bowman: I don’t think the reduction in interest rates has been that impactful since most small business term loans are fixed rates. Further, I think that small businesses may experience increases since a lot of their funding comes from credit cards.
What trends do you foresee for business interest rates in the coming years?
Dr. Bowman: What we’re hearing from many of the banks that we work with is that most of the larger changes are going to occur in late 2022.
What is the impact of nonbank and alternative lenders on the small business lending market?
Dr. Bowman: Alternative lenders have had a huge impact on providing access to capital for small businesses through the pandemic. Further, many of these alternative lenders provided more opportunity for access to capital for underserved populations. The fact that loan recipient information is public will also provide an opportunity for these alternative lenders to outreach to a lot of small businesses using traditional lenders.
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