Federal Rate Hikes Squeeze Minority-Owned Small Businesses
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Interest rate hikes by the Federal Reserve are making it harder for small businesses, especially those owned by women and minorities, to get affordable financing.
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Newer small businesses that started up in recent years when rates were very low are particularly vulnerable as rates rise.
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Tighter lending criteria at banks and less willingness to take on debt by consumers are reducing access to capital.
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While rate hikes are slowing inflation as intended, they are also impeding economic growth and disproportionately affecting underserved groups.
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Some lenders are trying to help by starting special programs for women- and minority-owned businesses, but high rates may still limit small business expansion and hiring.