ATLANTA — With inflation reaching a 40-year peak and the federal reserve implementing its largest rate hike since 1994, Americans have felt the strain on their wallets.
Small businesses will especially feel that squeeze.
For big corporations, a flexible loan interest rate increasing by a couple percentage points may not be a huge deal. But for some small businesses in metro Atlanta it could mean closed doors, and shattered dreams.
When you think business in Atlanta, you may think skyscrapers and power suits and big billions.
You might not think of Mika Clark.
“We are important too," said Clark, who started a behavioral health and social services business called Treasure Family Services.
“I grew up in an inner city, urban Atlanta, low income," she said. "I was able to see a lot of the trials and tribulations that a lot of my neighbors faced, so that led me to just feel like I wanted to help.”
A former social worker, Clark said it was a dream to branch out and start her Douglasville-based business.
“Making the world a better place, that's what we're doing," Clark said.
But she said the road to getting up and running wasn't an easy one.
“The biggest challenge was funding," she said. "I tried for like the big bank lenders and I was automatically declined. I even ran into some predatory lending. The interest rate is astronomical.”
Many small businesses who survived the storm of a global pandemic, now face cost and interest rate increases.
“It sets the whole business back to the point that they may shut down," said Desha Elliot, senior business advisor for the Accion Opportunity Fund, a nonprofit CDFI providing small businesses with access to responsible capital, networks, and coaching.
They’ve partnered with the Southern Opportunity and Resilience (SOAR) fund, offering loans with a 4% fixed interest rate that won’t change in the turbulent economy.
Qualifying businesses must be located in Alabama, Arkansas, Delaware, Florida, Georgia, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Texas, Virginia, or the District of Columbia.
Eligible businesses must employ 50 or fewer full-time employees, must have suffered a direct economic disruption as a result of COVID-19, and have a revenue less than $5 million.
"So far, the fund has dispersed over $31 million, so more than 620 small businesses," Elliott said. "Of the funds distributed to date, nearly 80% of those loans have gone to business owners who self-identify as a woman or a person of color.”
That included Clark.
“They approved me with the very low interest rate, it's locked in," Clark said. "It’s just as important for mom and pop and the smaller businesses that are in the community and providing services with all of our hearts.”
According to the US Chamber of Commerce, 51% of small business owners have had to cut staff or take out an extra loan because of inflation.
With business credit card rates also increasing, and supply chain disruptions, it’s another storm the businesses that make up metro Atlanta are trying to weather.
“We want to feed our families as well," said Clark. "We’re making our mark.”
The SOAR fund still has $32 million available.
You can learn more here.