Steve Conley: Crystal Ball 2019 Finance Outlook: More interest rate hikes expected for 2019 – MiBiz
Steve Conley was featured in MiBiz‘s article titled “Crystal Ball 2019 Finance Outlook: More interest rate hikes expected for 2019.”
Higher interest rates will make it a little more costly to borrow or access capital, pinching margins or even affecting some business expansion plans, said Steve Conley, managing director at the Grand Rapids office for turnaround firm Conway MacKenzie Inc.
Businesses already should have been planning ahead for rising interest rates, Conley said.
“It’ll be intriguing to see how they perform through that environment,” he said. “There’s definitely going to be some stress on these businesses that have been working really hard to bring in new business and grow their businesses while they had the opportunity. That’s required initial capital and initial financing. Have they prepared for the rising rates? That’s to be seen on how that will ultimately impact their business.”
Higher rates could steer more companies next year to take a look at alternative or non-bank financing to support capital equipment purchases or expansion, or pursue equipment leases rather than purchases, Conley said.
Despite the steady rise in rates since late 2016, Conley does not hear a lot of worry from clients. The tight labor market that limits their growth has been a greater topic of conversation than higher interest rates, he said.
“I sense that most people aren’t real concerned about it yet because it really hasn’t had a significant impact, but I’m concerned that people underestimate here in the medium term how impactful it’s going to be to their business and their ability to grow and maintain margins,” Conley said.