There are several different factors that can influence the interest rate for a loan, including the credit score of the individual applying for the loan, with higher scores typically drawing a lower interest rate, notes the First Internet Bank. However, even ideal loan applicants with flawless credit may be subject to unfavorable interest rates if the Federal Reserve and other governing bodies set monetary policy that leads to higher-than-average interest rates within the general financial market. In that sense, most of the time, the interest rate someone receives for a business loan is largely determined by factors that are outside of personal control.Continue Reading
Other outside forces that can influence the interest rates that lenders give out include the performance of economic indicators, such as gross domestic product, as reported by Investopedia. Inflation and erratic market performance can also have a positive or negative effect on a business loan interest rate.
Business owners who want to try to get a favorable interest rate should try to make sure they have good credit to get the best-possible chance for getting a good rate. Additionally, waiting for a time when the economy is generally slow and not many people are applying for loans could be a good idea because banks could try to entice new customers with attractive interest rates.Learn more about Credit & Lending