I don’t think that a small decrease in the prime rate will make much of a difference to the average business owner. Hopefully a rate drop helps to stimulate sales. That is what they really need and I’m hopeful that is what we will see this year.
I expect further credit tightening by traditional lenders as they themselves deal with increasing over sight and regulations. A few business owners will be surprised by this. Applying for credit will take longer, require more information and will be tougher to qualify for.
Some business owners, already in trouble with their lender will find out that 2024 is likely when it all ends. Lenders have been patient for a couple of years but if a turnaround hasn’t bee accomplished by now then a decision will be made that it never will. Everyone involved with insolvency will be busier.
In the world of equity financing there’s plenty of cash but fewer really good deals so I expect the sharks, dragons and vultures to be more active. They will apply even more pressure on owners of good and/or challenged businesses to prematurely dilute equity. Many business owners will regret having done so.
The internet will continue to offer quick and easy, one stop business finance solutions and some will resort to Artificial Intelligence (AI). Many business owners will take on bad loans and increasing amounts of unsupportable debt that will be very difficult and nearly impossible to pay off.
Fortunately more business owners will take the time to explore their financing options and many will discover new ways to access working capital and eliminate cash flow problems. This will help them to focus on their business and greatly increase their chances of having a successful year.
As you can see, I’m optimistic about 2024 and hopefully you are too. I will be driving across the country meeting business owners and individuals like yourself who have an interest in helping our business community with their financial challenges. I’ll be in touch!
