Dr. Everett Comments on SME Optimism Teeters Should the U.S. Be Worried? | PYMNTS
SME Optimism Teeters — Should the U.S. Be Worried?
PYMNTS.com quotes Dr. Craig R. Everett, Director of the Pepperdine Private Capital Markets Project at the Pepperdine Graziadio School of Business and Management. In an article about small and medium-size business optimism and where it might be headed, PYMNTS.com raises the issue of federal interest rates and how another increase could impact SME outlook. Cited research includes the Private Capital Access (PCA) Index, which is the result of research conducted through the Pepperdine Private Capital Markets Project in partnership with Dun & Bradstreet Corp.
The survey shows a decline in profitability and an inability to hire new staff as a direct result of higher interest rates. Dr. Everett advises business as follows: "If small businesses envision cash flow difficulties in the near future, they should consider strategies to hedge against the need to borrow, like maintaining the healthiest reserve possible and not committing to expenses before revenues are realized and banked. As long as optimism is tempered by caution, and access to capital doesn’t significantly decrease, impacts on growth should be minimized." Dr. Everett is also an Assistant Professor of Finance at the Pepperdine Graziadio Business School.