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Published November 08, 2022

With the Federal Reserve’s recent hikes of its federal funds rate, borrowers with small-business loans may think that they've missed their opportunity to refinance to a lower interest rate.

That’s not necessarily the case. A lower interest rate may still be within reach, because the rate you pay on your business loan is influenced by more than the Federal Reserve. And while a better interest rate can be helpful, it’s not the only reason to consider refinancing. Here’s what to keep in mind as you weigh your options.

Cash flow is vital, according to Frank LaMonaca, a mentor at SCORE, a nonprofit organization and resource partner of the Small Business Administration. “Businesses don’t fail because of a reasonable rate of interest on their loans. They fail due to a lack of liquidity when something goes wrong,” LaMonaca says. Small-business owners “should really be laser focused on cash flow. That’s what helps them survive day to day and through any hiccups,” he says.