Springfield, MO

Opinion: Competitive market requires plan for success

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Now almost halfway through 2017, it’s an opportune time to revisit business goals set at the start of the year. So, let’s take a moment to evaluate if your goals for the year are being met as projected and whether plans need to be adapted to help.

Here are five questions you should consider right now:

1. Is your business prepared for rising interest rates?  

Interest rates and Federal Reserve sentiment are in the news regularly, with the public continuing to watch rates gradually rise after years of stagnation. With the country steadily rebounding from the recession, the Fed in March increased its benchmark interest rate for the second time in three months to a range between 0.75 percent and 1 percent. Officials most recently as early May elected to maintain the rate range.

Springfield continues to have an extremely competitive interest rate market compared to the rest of the country. Interest rates remain of central importance for business owners as you consider such items as loan terms and evaluating leasing versus purchasing for commercial real estate.

2. Is refinancing an option?

As rates fluctuate, it is critical to evaluate refinancing options. This could be the time to consolidate debt or secure a better rate for a loan. Refinancing could open the door for a larger purchase later in the year or allow for a different goal to be reached more quickly.

Additionally, refinancing into a fixed rate loan may provide some peace of mind if you’re nervous about the impact of rising rates on an existing variable rate loan. A fixed rate offers something that business owners crave – predictability.

3. Do you have the right product for your needs?

It is also important to ensure you understand all the aspects of the business loan. Take time to research the different terms, and make sure they still are in line with business goals. There are several financing options available to business owners, and it might be time to explore a different product that better suits the needs of the business or the current industry environment.

4. Is it time to make a large purchase?   

Now is a great time to evaluate what is needed to help you navigate the rest of 2017. Because interest rates are unpredictable and have been on the rise, it is important to understand how a purchase now will impact the business down the road.

Real estate is also a key consideration for business owners, as it is often one of the largest expenses faced. Purchasing a space instead of renting could be a better long-term solution, given rents in many cities continue to rise at a pace that makes long-term agreements a less attractive option.

Ultimately, the window for low rates seems to be closing, so moving to a more entrepreneurial mindset and investing through capital expenditures may be beneficial.

5. Are you regularly communicating with advisers about your finances?

Business owners should consistently share what is happening and ask the tough questions to see what changes can be made to prepare for what’s ahead. Bankers and other financial advisers can help with current or future needs as the business owner prepares for leadership changes or other potential strategies for success.

Justin Butler is senior vice president and director of commercial business development for UMB Bank in Springfield. He can be reached at


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