The Biden Administration economy has ushered in astronomically high interest rates, some of the highest they have been since fears of Y2K ran rampant. The soaring inflation to go along with it, combined with the losses of COVID, has pushed some small businesses to the brink. The average interest rate has risen for small businesses alone, from 4.6% in August 2021 to 9.8% in September of this year. That is the highest since 2006.
More than half of small businesses reported the rise in rates hurt their business, with 19 percent saying they would be impacted down the road. This has led to businesses tightening the purse strings and putting off capital purchases.
Glenn Hammer, president and CEO of the Texas Association of Business, says though that there is some relieving news.
"Interest rates seem to be coming under control, and now there is increase optimism the Feds are at the end of raising rates," he says.
It is a good way to end what has been a tough year, and there may be enough of a scale back where we get to see inflation rates near 2 percent, or what we have come to know for the last few decades.
But here in the great State of Texas, things have been a little different than other places.
"We have added more jobs than any other state for the last few years...the good news for Texas businesses is we have an outstanding business environment," he says. "This has helped a lot of them weather the national inflation we have seen the last few years."
But there is an even bigger crutch that the state has had to lean on during the challenge.
"We are fortunate we are operating in the healthiest economy in the country...this last year, we experienced a 33-billion-dollar surplus. California, by contrast, has had a 32-billion-dollar deficit," he says.
A survey in September shows that 64 percent of small businesses were concerned the present economic landscape would force them to close.
But as we hit the home stretch of 2023, there is cause for some bloom instead of doom.
"It seems the inflation tailwinds are behind us...there will still a little inflation to wring out of the system, but directionally, it is going the right way," he says. "Businesses i Texas are optimistic of the health and future of the economy."