Add rising interest rates to the challenges that small businesses are already grappling with, including inflation, labor shortages and strained supply chains, the Wall Street Journal reported. Some small businesses are cutting back on borrowing, paying down debt or delaying expansion plans as interest rates rise. Others worry that rising rates will boost prices charged by suppliers and crimp customer demand. In November, the Federal Reserve raised its benchmark federal-funds rate by 0.75 percentage point, the fourth such increase this year, and said further rate increases were likely. For small businesses, those rate increases translate to higher costs on everything from credit cards to lines of credit to variable-rate small business loans. New financing has also gotten more costly. Forty-six percent of small-business owners said higher interest rates are affecting their business, according to an November survey of roughly 600 small businesses for the Wall Street Journal by Vistage Worldwide Inc., a business coaching and peer advisory firm. Another 25% of those surveyed said rising rates hadn’t yet had an effect, but anticipated they would.
