At the time this article was being written, the U.S. Bureau of Labor Statistics announced that the inflation rate for June fell to 3%. Given the stubborn nature of inflation over the past year, the 3% figure was a welcome surprise. Economists and the business community in general already began asking, “Is 3% inflation low enough to lower interest rates?”
It’s well known that the Fed is targeting a 2% inflation rate for the economy. But the uneven yet steady decline of inflation points to a possible lowering of rates by the end of summer.
If you are standing on the sidelines, waiting for rates to drop before you decide to finance, you may want to reconsider your strategy.
At the end of 2023, economists were predicting a series of rate cuts in 2024. July has come and gone, and we are still waiting for the first one. Secondly, a Fed Funds rate cut of 25 basis points does not translate into a 25-basis point rate cut for banks and other funders. Thirdly, and most important to you, is that a rate cut may not deliver a substantial savings for you.
Looking back over the recent rate increase, the monthly payment for a premium client financing $50K for a five-year term showed a $29 increase in the monthly payment. If rates decline in the same way, you can see that the savings are not worth holding off improvements and the additional sales that new or used equipment can generate.
We invite you to contact us at 412 262-3225 to discuss your particular situation. We offer various types of financing programs that suit all types of borrowers and business scenarios.
We are Acceptance Leasing and Financing Service, Inc. We were established in 1992, which puts us in our 32nd year of business. We pride ourselves on our Certified Leasing and Financing Professional designation. We are a member of SBCA and a frequent attendee of the BCMC tradeshows. We can provide financing for any new and, regardless of age, used equipment.