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20.04 18:14 - 4 WAYS HIGHER INTEREST RATES AFFECT YOUR BUSINESS
Автор: davidhill Категория: Бизнес   
Прочетен: 29 Коментари: 0 Гласове:
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 Reserve raised interest Federal rates for short-term borrowing by a quarter of a percent (0.25%). This is called the fed funds rate, which is the rate banks charge each other on overnight borrowing. As a result of the increase, the new target for the fed funds rate is 0.75% to 1%. This rate filters down into other interest rates , such as the prime rate-the lowest rate that money can be borrowed commercially. 

The prime rate is a benchmark for many types of loans, including mortgages and credit cards; it rose from 3.75% to 4% following the Federal Reserve's rate hike . The Federal Reserve anticipates two more interest increases this year.
If you have outstanding debt on which the interest rate is variable, such as a line of credit that you've drawn upon or outstanding business credit card debt, your repayment costs increase in tandem with rate hikes. This requires more money to repay your loans . Take the additional interest costs into account in your cash flow projections.Because customers are paying higher interest rates on their credit card debt, they may be less able to spend as they have previously done. The cost of servicing their debt may supplant spending money with you.

Of course, the rate hike has been modest, so the impact on sales may not be dramatic. But even a small decline can hit your sales revenue. Be sensitive to the buying power of your customers, especially as additional rate hikes come to pass.

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Автор: davidhill
Категория: Бизнес
Прочетен: 2070
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