Small Businesses Respond to Interest Rate Hike

GLENVIEW, IL--(Marketwired - December 21, 2015) - As the Federal Reserve raised interest rates for the first time in nearly a decade, 45% said it would have no impact, according to the December 2015 SurePayroll Small Business Scorecard.

Those in the financial services industry said it may actually help, as it could increase the cash value of life insurance policies, for instance.

Some said higher rates would make it more difficult to take out lines of credit and those in real estate worried about the cost of borrowing for home buyers. However, many entrepreneurs and startup founders are using non-bank alternative sources of lending or borrowing from friends and family. 

For the majority of small businesses, it appears the quarter of a percent raise in rates won't make a significant difference, as 61% said they have not benefited from the low rate environment. Still, 39% said it facilitated things like better cash flow and hiring more staff.

"Certainly affordable access to capital is a positive for someone trying to grow a business, and hopefully that will continue as rates are still relatively low," said SurePayroll General Manager Andy Roe. "On the other hand, many small businesses only have a few employees with small offices, or offices in their homes, so they don't tend to do much borrowing. For them, it's probably business as usual." 

In other findings from the SurePayroll survey, 66% of small businesses said they were profitable in 2015, compared to 61% in 2014. Looking forward to the new year, 64% are forecasting increased profitability. 

An infographic with the full results of the Scorecard survey is available on the SurePayroll blog.

About SurePayroll

SurePayroll is the trusted provider of easy online payroll services to small businesses nationwide. Whether a business has 1, 10, or 100 employees, SurePayroll delivers peace of mind by combining innovative, industry-leading technology and personalized support from an award-winning, U.S.-based customer care team. SurePayroll also provides private-label and co-branded services for accountants and banking partners as well as offering efficient online solutions for managing 401(k) plans, health insurance, workers' compensation, employee screening and more. SurePayroll is a wholly owned subsidiary of Paychex. For more information, please visit www.SurePayroll.com. Follow us on Twitter - Circle us on Google+ - Connect with us on LinkedIn - Like us on Facebook.

About Paychex

Paychex, Inc. (NASDAQ: PAYX) is a leading provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services. By combining its innovative software-as-a-service technology and mobility platform with dedicated, personal service, Paychex empowers small- and medium-sized business owners to focus on the growth and management of their business. Backed by more than 40 years of industry expertise, Paychex serves approximately 590,000 payroll clients across 100 locations and pays one out of every 15 American private sector employees. Learn more about Paychex by visiting www.paychex.com, and stay connected on Twitter and LinkedIn.

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Stefan Schumacher
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