How Is The Interest Rate Environment Going to Impact Business Bankers In 2024?

There are a lot of business bankers wishing for lower interest rates and professional pundits who are making arguments that interest rates will go lower! I am in the wishing camp as well! But just because we wish for rates to go lower it does not mean that it is going to happen. Life would be a lot easier if rates go down! Common business sense tells us that low interests are not indefinitely sustainable! Definitely not when the government is printing money and ballooning the national debt! Definitely not with a tremendous amount of economic uncertainty, political uncertainty, and environmental uncertainty.

Everyone is talking about the looming government shutdown! Our representatives in Washington can’t agree on anything. We don’t have a clear or viable strategy to reduce the national debt. We just keep adding to the national “tab.” Who is going to repay the debt and make the interest payments? At some point, our creditors are going to see us as a risk and want a higher return. This is how banks price their loans. Why wouldn’t our national debt creditors apply the same principle to us? Insurance costs are going through the roof for residential and commercial real estate because insurance companies see devastating impact of environmental change. Everyone one is feeling the impact of inflation and negotiating higher pay. Businesses will pass the higher labor cost to us in the form of higher prices for goods and services. Where is the support for lower interest rates? I am wishing for it, but I don’t see the support for it.

What am I going to do in 2024? I am embracing the very high probability that the current interest rate environment is here to stay for a while! I would be wasting my time targeting clients and prospects who are sitting around “wishing” that interest rates go down. In the end, I think they will be “wishing” that they would have done something sooner!

In every economic cycle and environment, there are always deals getting done! There is going to be a ton of maturing CRE debt in the next 2-5 years! You need to hunt down the CRE owners that have maturing debt. They will not have the luxury of sitting around wishing for rates to go lower. When the debt matures, they will have to act and you need to be there when they need you. There are going to be businesses that thrive in this environment and will be looking to capitalize on a competitor’s pain. They will be looking to either acquire competitors or aggressively expand. You need to be there when they make those decisions.

The point of this all is that nothing is going to change in 2024 if you sit around waiting for those clients and prospects who are sitting around waiting for rates to go lower. That is a lot of waiting around! You need to get up and go hunting for the deals that “must” get done in 2024! If you do, the story you tell about 2024 will put a big smile on your face and beef up your bank account!

Bizpetrol has information, insight and tools that will help you become a Business Banking Superstar! Enroll in the Business Banker Development Program. Learn more at https://www.bizpetrol.com/business-bankers. You can see all the Business Banking articles (like this one) at www.bizpetrol.com/blog. You can access a series of how-to business banker guides at https://www.bizpetrol.com/Downloads-Free.

Please spread the knowledge and share the article with your colleagues!  Follow #bizpetrol on LinkedIn!