Fed Rate Hike May Bite Small Businesses Without Early Financing

Cardiff, Inc., a San Diego-based small business lender, is warning entrepreneurs about the potential impact of the Federal Reserve's first rate hike since 2023 on their financing options. On September 16, the Fed lifted its benchmark interest rate by a quarter point to a target range of 3.75% to 4%. This change may affect businesses that have not yet secured funding for the fourth quarter.

Cardiff's advisors are working with business owners to assess their financing needs and consider options before the higher-rate environment takes effect. The company notes that not all small-business financing responds to rate increases in the same way, and payments can rise for products with a variable interest rate tied to a floating benchmark.

The lender offers several types of financing, including business term loans, equipment financing, business lines of credit, and invoice financing, which give owners different ways to address expenses based on their individual circumstances. Cardiff pairs this range of products with an underwriting process that combines automated tools with human review, allowing the company to evaluate which financing option may fit a particular business.

As the Federal Reserve signals the possibility of another increase before the end of the year, Cardiff is encouraging small business owners to plan their financing decisions in advance. Business owners entering the fourth quarter without financing in place may have fewer options if a cash flow gap forces a decision under time pressure.