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3 Reasons Business Owners Are Likely to Succeed in 2024

Learn the 3 reasons small business owners are likely to succeed in 2024.
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Small business owners are some of the smartest and most hardworking people around. Part of that intelligence comes from educating themselves on how the economic outlook for the year plays into their overall financial goals for the business. The economic impact for the year can also play a big part in the potential for projected income for a small business and, to some extent, their ability to secure the money that helps make forward-moving business decisions possible.

In 2024, the economy seems to be serving up a mixed bag, at least in the minds of business owners. For example, although polls show that 75% of small business owners say that they feel positive about their overall finances through 2024, only 28% of small business owners say that they view the national economy in a positive light[1]. That’s not too surprising, given the interest rate turbulence and additional post-pandemic growth challenges that still existed in 2023[2]. The Small Business Administration even reported that loan defaults were rising in 2023. This after defaults fell in the years immediately after 2020, when pandemic relief programs provided some much-needed assistance to struggling businesses[3].

With an eye on preparation and future growth, here are a few things business owners should keep in mind moving into the rest of the year and beyond.

The Fed is expected to cut interest rates
Since most small business loan rates are sensitive to overall interest rate changes, owners that follow how the Fed is handling rates will be better able to gauge what their business borrowing may look like for the year ahead. The latest news on this front is a mixed bag. While the beginning of the year had 9 in 10 economists forecasting that the Fed would cut its benchmark rate by May, a shifting economic landscape led to the central bank announcing would hold in a range of 5.25% to 5.5% - so where they’ve been since July 2023[4]. However, there are two silver linings here: rates are still expected to drop, just not until September or November, and those with reserves in high-interest savings accounts will see yields above 5%. 

When the rates do drop and borrowing becomes more affordable, owners can stay on top of opportunities to get their hands on the cash they need to enhance their businesses. This is particularly important for owners who may have held off last year when interest rates were less than optimal. Shopping around for the best small business loan includes taking multiple factors into consideration. For example, a BankUnited SBA Express Loan offers business owners flexible financing to borrow up to $350,000 with lower down payments, easier qualifications and expedited approval times.

More lenders are being upfront about the Annual Percentage Rates (APRs) of loans
A bill introduced in the House in 2020 was aimed at protecting small business owners from predatory lending practices through provisions like ensuring lenders disclose the terms of financing upon extending an offer. While the bill hasn’t yet become law, some lenders are taking it upon themselves to extend these courtesies to small business owners anyway. By disclosing the Annual Percentage Rate (or APR) for lending terms, owners can get a better grasp of what the total overall cost of their loan will be for the year. That’s because an APR represents total interest rate for the entire year, plus any other costs or fees that go along with it[5]. With this more complete picture of how much it costs in total to take out a particular loan, business owners can determine whether that price is something they can afford, particularly when compared to what that cash infusion could help provide for the business.

The price tag of having a physical business space is declining
Gone are the pandemic days of customers preferring to shop online — these days, consumers want the in-person experience. According to some statistics, 94% of customers are shopping in physical stores again, while 40% of consumers make an in-person purchase each week[6]. This is great news for small business owners looking to expand their brick-and-mortar offerings this year, particularly as office rents are set to decline up to 4% in 2024[7]. As small business owners consider their options — whether that’s opening their first store, expanding their current offerings, or building their own, customized space — now is also a great time for them to consider how a small business loan can help with those goals. BankUnited’s SBA 504 Loan, for example, is ideal for the purchase, construction or renovation of owner-occupied commercial real estate.

As Americans continue to pursue their dreams of small business ownership — new Census data shows a record-breaking 5.5 million new business applications were filed in 2023, after all, making it the strongest year on record[8] — figuring out how to get the cash they need to build those dreams out is essential.

Learn how BankUnited can help your business go for more. Check out our business lending solutions or contact us directly and a Business Banker will be in touch with you shortly.

All content is for informational purposes only and does not constitute legal, tax, or accounting advice. You should consult your legal and tax or accounting advisors before making any financial decisions.