On June 15th, the Federal Reserve Bank raised its benchmark interest rate for the third time this year. It was its biggest increase since 1994. The Fed raised rates by three quarters of a percentage point, and indicated that further increases would follow in July. Nonetheless, Fed chairman Jerome Powell said “I do not expect moves of this size to be common.”
While the steady headlines of “Interest rates rising” continue, it’s worth noting that the Fed committee’s June statement painted a largely optimistic picture of the economy, even with higher inflation, the war in Ukraine, and supply chain disruptions due to COVID lockdowns in China. The Fed is committed to achieving maximum employment and inflation at 2% over the long run.
If rate hikes are keeping you from financing equipment, consider this: Interest rates are STILL relatively low. The Fed’s benchmark rate will end the year at around 3.4%. Consider that the long-term average prime rate is 6.81%!
While the economy is expected to slow, economic growth in 2022 is still expected to be positive, at 1.7%. Demand for products will continue.
Asset-based lending has the advantage of locking in the rate at the time of approval, and stays fixed until maturity! That’s right: The rate remains FIXED, despite any future rate increases by the Fed. You have the advantage of knowing what your payment will be, month after month, plus, there is no cumbersome or time-consuming yearly financial reporting to do.
Consider saving by financing today. There are a number of programs available to assist every type of borrower, from start-ups to well-established business.
We work closely with you to obtain the best rates with the best terms. Call us at 412 262-3225.
We are Acceptance Leasing and Financing Service. We’re proud to be celebrating our 30th anniversary in business this year. Established in 1992, we pride ourselves on our Certified Leasing and Financing Professional designation. A member of SBCA and a frequent attendee of the BCMC trade shows, Acceptance Leasing and Financing Service, Inc. knows the equipment of the component manufacturing industry and is ready to assist you with your financing needs. We can provide financing from any new and, regardless of age, used equipment. Also: Ask about our “Equipment Plus Cash” program.