Half of U.S. small-business owners say that rising interest rates over the past 18 months have eroded their margins, reduced revenue and reversed their growth, a survey conducted by Alignable showed, Bloomberg News reported. Rates would need to fall substantially before business would improve, according to the online referral network for small businesses. The survey is based on a poll of 7,396 randomly selected small-business owners from Aug. 4 to Sept. 18. More than two-thirds say that a decline in interest rates of at least 3 percentage points would be needed before they envision business activity rebounding again. Among the reasons cited for the decline in business were variable-rate Small Business Administration loans which change based on the actions taken by the Federal Reserve. The Fed has increased the range of its benchmark rate by more than 5 percentage points to a 22-year high of 5.25% to 5.5%. Others cited the cumulative effects from labor issues, rent spikes, inflation and an inability to raise prices at a similar pace. A pickup in gasoline prices has also had a negative economic impact. The real estate industry and housing-related services were the most impacted by higher borrowing costs.
