Business loans often carry adjustable rates, meaning your monthly payment can increase when interest rates rise (like the bump we had in December).
Avoid potential headaches by talking to your lender about possible solutions to combat rising rates:
– Consider a longer term for new loans to spread out repayment over a greater period of time, which lowers monthly payments.
– Refinance conventional debt with an SBA loan to lower your rate or extend the term, which can help increase cash flow and/or avoid a balloon payment.
– Make additional principal payments, when possible, throughout the year to control long-term risk.
– Garrett Von Eye, USAmeriBank