In Times of Rising Interest Rates, An Inverted Yield Curve Can Benefit You

Rising interest rates, designed to cool inflation, also mean that it can be more expensive to access the necessary capital to innovate. Businesses seeking a bank loan may encounter short-term loan rates to be much higher than they’ve seen for several years. 

Under normal economic conditions, short-term loans are typically a more affordable option, but in an environment like today’s, where we see an inverted yield curve, a unique opportunity for borrowers presents itself. 

The opportunity an inverted yield curve presents to borrowers

Sometimes, like now, when the yield curve is inverted, longer-term loans suddenly provide better rates than shorter-term loans. Borrowers in today’s economic climate have the unique opportunity to utilize longer-term business loans for a lower interest rate, while locking in costs for the future.

For eligible borrowers, using the current economic climate to their advantage can help protect their business from rising interest rate environments, saving them money in the long-term and adding stability to their current plans. A shift in the current loan solution also provides the business the capital needed in order to continue growth and meet goals for the year.   

Uncertain economic times and unusual situations call for creativity and tailored solutions. Borrowers need the flexibility to have their loans structured a little differently and in their favor. Creativity in lending solutions requires specialized expertise, a trusted financial partner, and communication and guidance along the way. Our experienced lending team can help you get this right.

The right partner to navigate rising rates and all the rest

First American Bank is a partner that studies where opportunity lies across all economic landscapes, in order to best serve their business clients. We tailor lending structures to the needs of our clients, so that they can continue moving towards growth and meeting their goals. 

Our time is spent crafting individualized lending options for our business clients so that they can feel secure and confident in their future. 

With the right adjustment to your lending structure, you can move confidently through rising interest rates and the inflationary market. Start a conversation with one of our experts today so that we can find the right lending products for you.