A flattening yield curve as the short end rises is an opportunity for business owners to take advantage of unique circumstances.
Business Savings Accounts and Business CD's have been yielding more lately as borrowing cost remain low. This dynamic happens when the FOMC raises the Fed Target Rate and at the same time the rest of the US Treasury Yield Curve moves down.
Banks and Lenders might not like this flattening of the yield curve because it represents less profit spread, but the small business borrower should embrace circumstance of low yields at the long end of the curve.
The Average interest rate for small business loans varies depending on the type of loan product and the type of lender. Loans from traditional lenders, such as banks or credit unions, can have APR's ranging from 5% to 13% while alternative or online loans can have APR's ranging from 6% to 80%
Current SBA 7(a) loan interest rates as of June 2017
SBA loan size 7(a) loan paid off in under 7 years *
7(a) loan paid off in over 7 years *
$25,000 or less 8.25%
$25,001 to $50,000 7.25%
More than $50,000 6.25%
*Rates calculated with the current prime rate of 4%
In the past 3 months Deposit rates for small business and consumers have gone up slightly, at the same time borrowing rate have stayed the same, or gone down slightly.
2017 in one of the best years in recent history to have an idea, form a team, write a business plan and put that idea into action.
Vilnius Industries is a small business, author, writer and investor. Vilnius produces proprietary content and material under the label of T.E.P.S which is a registered copyright. More of our content can be viewed at LinkedIn, Facebook and Bank of America Small Business Community.
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