As the banking crisis intensifies, small business owners are increasingly concerned that their lines of credit may be canceled, with rising interest rates further diminishing loans in the financial sector. Molly Day, vice president of public affairs with the National Small Business Association (NSBA), noted that small businesses have faced similar situations before, but unlike large businesses, they often have little recourse.
The 2007-2009 recession severely affected the small business sector, with fewer startups, layoffs, and slowed commercial lending. Recently, the NSBA released a poll on the state of lending in the U.S. following the collapse of Silicon Valley Bank (SVB). Over half of respondents reported being unable to obtain adequate financing, while a third said that terms have become less favorable in just the last month.
In the tech sector, the potential cancellation of credit lines can have significant growth impacts for firms attempting to scale rapidly. Manufacturing may also be heavily affected due to the costs of materials and labor.
JPMorgan Chase CEO Jamie Dimon warned that the turmoil in the financial sector following recent bank collapses is not over and will continue to impact the economy for years. Small businesses are particularly concerned about rising interest rates and their ability to operate amidst higher payments, inflation worries, and potential recession.
Talley's team of tax professionals provide comprehensive tax compliance and consulting services so you can preserve, enhance, and pass on your assets and wealth to the next generation. We welcome the opportunity to discuss the current options available for you. For more information, contact us today.