JACKSONVILLE, Florida. – The Federal Reserve on Wednesday stepped up its efforts to rein in high inflation by raising its key interest rate by three-quarters of a point – its biggest hike in nearly three decades – and signaling bigger rate hikes to come which would increase the risk of another recession.
The decision announced by the Fed after its last policy meeting will increase its benchmark short-term rate, which affects many loans to individuals and businesses. The central bank is stepping up efforts to tighten credit and slow growth as inflation hit a four-decade high of 8.6%, spreading to more parts of the economy and showing no signs of slowing.
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News4JAX spoke with owners and managers starting or expanding in northeast Florida, like Homespun Kitchen. It has operated in Atlantic Beach since 2009, but is working to expand to Riverside.
Cody DuClos, manager of Homespun Kitchen, says things are on track, but the move hasn’t been without its challenges.
“We just have to find things that are available and change, you know? In a way, we expected things to revolve around what we can get,” DuClos said.
He is busy getting the new location up and running for an early July opening. He said the expansion has encountered delays and logistical challenges that he did not expect.
“Throughout COVID, we’ve struggled to get things like wrap cups, that nature, when it comes to opening the new restaurant,” DuClos said. “We are seeing delays of up to six months on equipment, things like coolers, ice makers and so on. We had to look around, get creative to find things that are actually available now that we can use. »
In addition to months-long delays for equipment and supplies, DuClos said inflation and the resulting rise in interest rates are discouraging more people from spending money, hurting every commercial enterprise.
Other business owners say they likely would have reconsidered their expansion plans had they known where the economy was going.
Kristen Tackett is the Local Business Development Manager for Florida First Capital Finance Corporation. It helps companies finance themselves and start up.
“Every time the rate goes up, like today, your payment goes up, and it will literally cost you, you know, business, quite frankly,” Tackett said.
Tackett says stressful economic conditions don’t prevent businesses from starting, but they do make things much more risky and require extra caution and consideration.
“If you’re financing things, make sure you have the best possible terms, you can get fixed interest rates so you know exactly what your monthly payments are for those types of things. And money – you have to have money to weather these storms,” Tackett said.
Tackett said if you’re considering starting or expanding a business, it’s crucial to explore all of your financing options.
USEFUL LINK: Funding programs through the US Small Business Administration
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